UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-K

(Mark One)

ý

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended March 31, 2011

OR

o

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period
from to

Commission file number 1-8747

AMC ENTERTAINMENT INC.(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization)

43-1304369
(I.R.S. Employer
Identification No.)

920 Main

Kansas City, Missouri

64105

(Address of principal executive offices)

(Zip Code)

Registrant's
telephone number, including area code: (816) 221-4000

Securities
registered pursuant to Section 12(b) of the Act: None

Securities
registered pursuant to Section 12(g) of the Act: None.

Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act. Yes o No ý

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the
Act. Yes o No ý

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the
past 90 days. Yes ý No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulations S-T (§229.405 of this chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit such files). Yes o No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter)
is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. ý

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting
company. See definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o

Accelerated filer o

Non-accelerated filer ý(Do not check if a
smaller reporting company)

Smaller reporting company o

Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Act). Yes o No ý

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at
which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant's most recently completed second fiscal quarter.

No
voting stock of AMC Entertainment Inc. is held by non-affiliates of AMC Entertainment Inc.

In addition to historical information, this Annual Report on Form 10-K contains "forward-looking statements" within
the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. The
words "forecast," "estimate," "project," "intend," "expect," "should," "believe" and similar expressions are intended to identify forward-looking statements. These forward-looking statements involve
known and unknown risks, uncertainties, assumptions and other factors, including those discussed in "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of
Operations of AMC Entertainment Inc.," which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed
or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, the following:



national, regional and local economic conditions that may affect the markets in which we or our joint venture investees
operate;



the levels of expenditures on entertainment in general and movie theatres in particular;



increased competition within movie exhibition or other competitive entertainment mediums;



technological changes and innovations, including alternative methods for delivering movies to consumers;



the popularity of major motion picture releases;



shifts in population and other demographics;



our ability to renew expiring contracts at favorable rates, or to replace them with new contracts that are comparably
favorable to us;



our need for, and ability to obtain, additional funding for acquisitions and operations;



risks and uncertainties relating to our significant indebtedness;



fluctuations in operating costs;



capital expenditure requirements;



changes in interest rates; and



changes in accounting principles, policies or guidelines.

This
list of factors that may affect future performance and the accuracy of forward-looking statements is illustrative but not exhaustive. In addition, new risks and uncertainties may
arise from time to time. Accordingly, all forward-looking statements should be evaluated with an understanding of their inherent uncertainty.

Except
as required by law, we assume no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ
materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

We
were founded in Kansas City, Missouri in 1920. AMCE was incorporated under the laws of the state of Delaware on June 13, 1983. We maintain our principal executive offices at
920 Main Street, Kansas City, Missouri 64105. Our telephone number at such address is (816) 221-4000. Our Internet address is www.amctheatres.com. Our Annual Reports on
Form 10-K, Quarterly Reports on Form 10-Q and current reports on Form 8-K, and amendments to these Reports are available free of charge on our
Internet website under the heading "Investor Relations" as soon as practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission.

(b) Financial Information about Segments

In fiscal 2011, 2010 and 2009, we identified one reportable segment for our theatrical exhibition operations. Previously, we had three operating segments which
consisted of United States and Canada Theatrical Exhibition, International Theatrical Exhibition, and Other. The reduction in the number of operating segments was a result of the disposition of
Cinemex in December 2008. Cinemex was previously reported in the International Theatrical Exhibition operating segment and accounted for a substantial majority of that segment. In addition, in fiscal
2009, we consolidated the Other operating segment with the United States and Canada Theatrical Exhibition operating segment due to a previous contribution of advertising net assets to National
CineMedia, LLC ("NCM"). In fiscal 2009, the United States and Canada Theatrical Exhibition operating segment was renamed the Theatrical Exhibition operating segment.

For
information about our operating segment, see Note 16Operating Segment to the Consolidated Financial Statements under Part II Item 8 of this Annual
Report on Form 10-K.

(c) Narrative Description of Business

We are one of the world's leading theatrical exhibition companies. As of March 31, 2011, we owned, operated or held interests in 360 movie theatres with a
total of 5,128 screens, approximately 99% of
which were located in the United States and Canada. Our theatres are primarily located in major metropolitan markets, which we believe offer strategic, operational and financial advantages. We also
have a modern, highly productive theatre circuit that leads the theatrical exhibition industry in key asset quality and performance metrics, such as revenues per head and per theatre productivity
measures. Our industry leading performance is largely driven by the quality of our theatre sites, our operating practices, which focus on delivering the best customer experience through consumer
focused innovation, and, most recently, our implementation of premium sight and sound formats, which we believe will be key components of the future movie-going experience. As of March 31,
2011, we are the largest IMAX exhibitor in the world with a 45% market share in the United States and nearly twice the screen count of the second largest U.S. IMAX exhibitor, and each of our local
IMAX installations is protected by geographic exclusivity.

Approximately
200 million consumers have attended our theatres each year for the past five years. We offer these consumers a fully immersive out-of-home
entertainment experience by featuring a wide array of entertainment alternatives, including popular movies, throughout the day and at different price points. This broad range of entertainment
alternatives appeals to a wide variety of consumers across different age, gender, and socioeconomic demographics. For example, in addition to traditional film programming, we offer more diversified
programming that includes independent and foreign films, performing arts, music and sports. We also offer food and beverage alternatives beyond traditional concession items, including
made-to-order meals, customized coffee, healthy snacks and dine-in theatre options, all designed to create further service and selection for our consumers. We
believe there is potential for us to further increase our annual attendance as we gain market share from other in-home and out-of-home entertainment options.

Our
large annual attendance has made us an important partner to content providers who want access and distribution to consumers. We currently generate 16% more estimated unique visitors
per year (33.3 million) than HBO's subscribers (28.6 million) and 67% more than Netflix's subscribers (20.0 million) according to the October 14, 2010 Hollywood Reporter, the
December 31, 2010 Netflix Form 10-K and the Theatrical Market Statistics 2010 report from the Motion
Picture Association of America. Further underscoring our importance to content providers, we represent approximately 17% to 20%, on average, of each of the 6 largest grossing studios' U.S. box office
revenues. Average annual film rental payments to each of these studios ranged from approximately $100 million to $160 million.

For
the fiscal year ended March 31, 2011, the fiscal year ended April 1, 2010 and the fiscal year ended April 2, 2009, we generated revenues of approximately
$2.4 billion, $2.4 billion and $2.3 billion, respectively, Adjusted EBITDA (as defined on page 43) of $277.5 million, $328.3 million and
$294.9 million, respectively, and earnings (loss) from continuing operations of $(123.4) million, $77.3 million and $(90.9) million, respectively.

The
following table provides detail with respect to digital delivery, 3D enabled projection, large screen formats, such as IMAX and our proprietary ETX, and deployment of our enhanced
food and beverage offerings as deployed throughout our circuit on March 31, 2011.

The
following table provides detail with respect to the geographic location of our Theatrical Exhibition circuit as of March 31, 2011:

Theatrical Exhibition

Theatres(1)

Screens(1)

California

44

649

Illinois

45

504

Texas

21

413

Florida

20

366

New Jersey

23

304

New York

24

266

Indiana

22

262

Michigan

10

184

Colorado

13

173

Georgia

11

167

Arizona

9

160

Missouri

12

140

Washington

11

137

Massachusetts

10

129

Maryland

12

127

Pennsylvania

10

126

Virginia

7

113

Minnesota

7

111

Ohio

6

94

Louisiana

5

68

Wisconsin

4

63

North Carolina

3

60

Oklahoma

3

60

Kansas

2

48

Connecticut

2

36

Iowa

2

31

Nebraska

1

24

District of Columbia

3

22

Kentucky

1

20

Arkansas

1

16

South Carolina

1

14

Nevada

1

10

Utah

1

9

Canada

8

167

China (Hong Kong)(2)

2

13

France

1

14

United Kingdom

2

28

Total Theatrical Exhibition

360

5,128

(1)

Included
in the above table are 8 theatres and 96 screens that we manage or in which we have a partial interest. We manage 3 theatres where we receive a fee
from the owner and where we do not own any economic interest in the theatre. We manage and own 50% economic interests in 3 theatres accounted for following the equity method and own a 50% economic
interest in 1 IMAX screen accounted for following the equity method.

(2)

In
Hong Kong, we maintain a partial interest represented by a license agreement for use of our trademark.

We
were founded in 1920 and since then have pioneered many of the theatrical exhibition industry's most important innovations, including the multiplex theatre format in
the early 1960s and the North American megaplex theatre format in the mid-1990s. In addition, we have acquired some of the most respected companies in the theatrical exhibition industry,
including Loews, General Cinema and, more recently, Kerasotes. Our historic growth has been driven by a combination of organic growth and acquisition strategies, in addition to strategic alliances and
partnerships that highlight our ability to capture innovation and value beyond the traditional exhibition space. For example:



In March 2011, we announced the launch of an innovative distribution company called Open Road Films along with another
major theatrical exhibition chain. Open Road Films will be a dynamic acquisition-based domestic theatrical distribution company that will concentrate on wide-release movies;



In March 2005, we formed a joint venture with one of the major theatrical exhibition chains which combined our respective
cinema screen advertising businesses into a company called NCM and in July 2005, another of the major theatrical exhibition chains joined NCM as one of the founding members. As of March 31,
2011, we owned 17,323,782 common units in NCM, or a 15.66% ownership interest in NCM. All of our NCM membership units are redeemable for, at the option of NCM, cash or shares of common stock of
NCM, Inc. on a share-for-share basis. The estimated fair market value of our units in NCM was approximately $323.4 million based on the closing price per share of
NCM, Inc. on March 31, 2011 of $18.67 per share;



We hold a 29% interest in DCIP, a joint venture charged with implementing digital cinema in the Company's theatres; and



We hold a 26.22% interest in Movietickets.com, a joint venture that provides moviegoers with a way to buy movie tickets
online, access local showtime information, view trailers and read reviews.

Consistent
with our history and culture of innovation, we believe we have pioneered a new way of thinking about theatrical exhibition: as a consumer entertainment provider. This vision,
which introduces a strategic and marketing overlay to traditional theatrical exhibition, has been instrumental in driving and redirecting our future strategy.

The
following table sets forth our historical information, on a continuing operations basis, concerning new builds (including expansions), acquisitions and dispositions and
end-of-period operated theatres and screens through March 31, 2011:

We
have also created and invested in a number of allied businesses and strategic initiatives that have created differentiated viewing formats and experiences, greater variety in food and
beverage options and value appreciation for our company. We believe these initiatives will continue to generate incremental value for our company in the future. For example:



During fiscal 2010, DCIP, our joint venture with two other exhibitors, completed its formation and $660.0 million
funding to facilitate the financing and deployment of digital technology in our theatres. During March of 2011, DCIP completed additional financing of $220.0 million, which we believe will
allow us to complete our planned digital deployments. We anticipate that our deployment of digital projection systems should take three and a half years to complete. Future digital cinema developments
will be managed by DCIP, subject to certain approvals. We intend to continue our rapid deployment of digital projectors through our arrangements with DCIP and expect to have installed over 3,800
digital projectors by the end of fiscal year 2012.



To complement our deployment of digital technology, in 2006 we partnered with RealD to install their 3D enabled systems in
our theatres. As of March 31, 2011, we had 1,603 RealD, 107 IMAX and 14 ETX 3D-enabled systems. During the past year, 3D films have generated approximately 10% greater attendance and
approximately 40% greater admissions revenue than the standard 2D versions of the same film at an additional $1 to $5 per ticket. Concurrent with our digital rollout, we plan on having 2,250
RealD screens across our circuit by the end of fiscal year 2012.



We are the world's largest IMAX exhibitor with 107 screens (all 3D-enabled) as of March 31, 2011. With a 45% market
share in the U.S. (as of March 31, 2011), our IMAX screen count is nearly twice the screen count of the second largest U.S. IMAX exhibitor. During June 2010, we announced an expansion of our
IMAX relationship. Under this expanded agreement, we expect to increase our IMAX screen count to 129 by the end of fiscal year 2012.



During fiscal 2010, we introduced our proprietary large-screen digital format, ETX and as of March 31, 2011 we
operated at 14 locations. ETX features wall-to-wall screens that are 20% larger than traditional screens, a custom sound system that is three times more powerful than a
traditional auditorium, and 3D-enabled digital projection with twice the clarity of high definition. We charge a premium price for the ETX experience, which produces average weekly box office per
print that is 140% more than standard 2D versions of the same movie. We plan to have 17 ETX large screen formats by the end of fiscal year 2012.



Currently, we have 138 theatres featuring one or more of our proprietary food and beverage concepts. We believe that these
enhanced food and beverage concepts allow us to offer a more diverse array of food types such as expanded menus and venues including dine-in theatre options, which should appeal to a
greater cross section of potential customers. We plan to continue to invest in one or more food and beverage offerings across 125 to 150 theatres over the next three years.



We are a founding member of NCM, a cinema screen advertising venture. As of March 31, 2011, we had a 15.66%
interest in NCM. See Note 6Investments to the audited Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K. NCM operates an
in-theatre digital network in the United States. The digital network consists of projectors used to display advertising and other non-film events. NCM's primary activities that
impact our theatres include:

We believe that the reach, scope and digital delivery capability of NCM's network provides an effective platform for
national, regional and local advertisers to reach an engaged audience. We receive a monthly theatre access fee for participation in the NCM network. In addition, we are entitled to receive mandatory
quarterly distributions of excess cash from NCM.



Our tickets are currently on sale at two different Internet ticketing vendors. We are a founding partner and current owner
of approximately 26.22% of MovieTickets.com, an Internet ticketing venture representing over 200 exhibitors with 14,000 screens. During 2010, MovieTickets.com sold over 16 million tickets,
including approximately 7.3 million for us. We also partner with Fandango for Internet ticketing services for certain of our theatres. During 2010, Fandango sold over four million tickets for
us.

Disposition of International Theatrical Exhibition Operating Segment

From fiscal 2006 to fiscal 2009 we disposed of the theatres owned and operated by us in Japan, Hong Kong, Spain, Portugal and Mexico,
as well as all joint venture ownership interests in international theatres in Argentina, Brazil, Chile, Uruguay and Spain. The operations and cash flows of these theatres have been eliminated from our
ongoing operations as a result of the dispositions. We do not have any significant continuing involvement in these theatres. The results of operations of those theatres owned and operated by us have
been classified as discontinued operations for all periods presented.

Theatre and Other Closures

During the fourth quarter of our fiscal year ending March 31, 2011, we evaluated excess capacity and vacant and under-utilized
retail space throughout our theatre circuit. On March 28, 2011, management decided to permanently close 73 underperforming screens and auditoriums in six theatre locations in the United States
and Canada while continuing to operate 89 screens at these locations. The permanently closed screens are physically segregated from the screens that will remain in operation and access to the closed
space is restricted. Additionally, management decided to discontinue development of and cease use of (including for storage) certain vacant and under-utilized retail space at four other theatres in
the United States and the United Kingdom. As a result of closing the screens and auditoriums and discontinuing the development and use of the other spaces, we recorded a charge of $55 million
for theatre and other closure expense during the fiscal year ending March 31, 2011. The charge to theatre and other closure expense reflects the discounted contractual amounts of the existing
lease obligations for the remaining 7 to 13 year terms of the leases as well as expenses incurred for related asset removal and shutdown costs. A significant portion of each of the affected
properties will be closed and no longer used. The charges to theatre and other closure expense do not result in any new, increased or accelerated obligations for cash payments related to the
underlying long-term operating lease agreements. We expect that the estimated future savings in rent expense and variable operating expenses as a result of our exit plan and from operating
these ten theatres in a more efficient manner will exceed the estimated loss in attendance and revenues that we may experience related to the closed auditoriums.

Mergers and Acquisitions

On May 24, 2010, we completed the acquisition of 92 theatres and 928 screens from Kerasotes (the "Kerasotes Acquisition").
Kerasotes operated 95 theatres and 972 screens in mid-sized, suburban and metropolitan markets, primarily in the Midwest. More than three quarters of the Kerasotes theatres feature stadium
seating and almost 90% have been built since 1994. The purchase price for the Kerasotes theatres paid in cash at closing was $276.8 million, net of cash acquired, and was subject to working
capital and other purchase price adjustments. We paid working capital and other purchase price adjustments of $3.8 million during the second quarter of fiscal 2011, based on the final closing

date
working capital and deferred revenue amounts and have included this amount as part of the total purchase price. The acquisition of Kerasotes significantly increased our size. For additional
information about the Kerasotes Acquisition, see the notes to our audited Consolidated Financial Statements for the fiscal year ended March 31, 2011 included elsewhere in this Annual Report on
Form 10-K.

On
March 31, 2011, Marquee Holdings Inc. ("Holdings"), a direct, wholly-owned subsidiary of Parent and a holding company, the sole asset of which consisted of the capital stock of
AMCE, was merged with and into Parent, with Parent continuing as the surviving entity (the "Holdings Merger"). As a result of the merger, AMCE became a direct subsidiary of Parent.

Original Notes Offering, Cash Tender Offers and Redemptions

On December 15, 2010, we issued $600.0 million aggregate principal amount of the original notes pursuant to an indenture,
dated as of December 15, 2010, among the Issuer, the guarantors named therein and U.S. Bank National Association, as trustee (the "Indenture"). The Indenture provides that the notes are general
unsecured senior subordinated obligations of the Company and are fully and unconditionally guaranteed on a joint and several senior subordinated unsecured basis by all of our existing and future
domestic restricted subsidiaries that guarantee our other indebtedness.

Concurrently
with the initial notes offering, we launched a cash tender offer and consent solicitation for any and all of our currently outstanding 11% Senior Subordinated Notes due 2016
(the "2016 Senior Subordinated Notes") at a purchase price of $1,031.00 plus a $30.00 consent fee for each $1,000.00 of principal amount of currently outstanding 2016 Subordinated Notes validly
tendered and accepted by us
on or before the early tender date, and Holdings launched a tender offer for its 12% Senior Discount Notes due 2014 (the "Discount Notes due 2014") at a purchase price of $797.00 plus a $30.00 consent
fee for each $1,000.00 face amount (or $792.09 accreted value) of currently outstanding Discount Notes due 2014 validly tendered and accepted by Holdings on or before the early tender date (the "Cash
Tender Offers"). As of December 29, 2010, we had purchased $95.1 million principal amount of our 2016 Senior Subordinated Notes for a total consideration of $104.8 million, and
Holdings had purchased $215.5 million principal amount at face value (or $170.7 million accreted value) of the Discount Notes due 2014 for a total consideration of $185.0 million.
We recorded a loss on extinguishment for the 2016 Senior Subordinated Notes and our Senior Secured Credit Facility Amendment of approximately $11.0 million and Holdings recorded a loss on
extinguishment for the Discount Notes due 2014 of approximately $10.7 million.

We
used a portion of the net proceeds from the issuance of the original notes to pay the consideration for the 2016 Senior Subordinated Notes Cash Tender Offer plus any accrued and
unpaid interest and distributed proceeds to Holdings to be applied to the Holdings Discount Notes due 2014 Cash Tender Offer. On January 3, 2011, Holdings redeemed $88.5 million
principal amount at face value (or $70.1 million accreted value) of the Discount Notes due 2014 that remained outstanding after the closing of the Cash Tender Offer at a price of $823.77 per
$1,000.00 face amount (or $792.09 accreted value) of Discount Notes due 2014 for a total consideration of $76.1 million in accordance with the terms of the indenture governing the Discount
Notes due 2014, as amended pursuant to the consent solicitation. Holdings recorded an additional loss on extinguishment related to the Discount Notes due 2014 of approximately $4.1 million. On
December 30, 2010, we issued an irrevocable notice of redemption in respect of the $229.9 million principal amount of 2016 Senior Subordinated Notes that remained outstanding after the
closing of the Cash Tender Offers, and we redeemed the remaining 2016 Senior Subordinated Notes at a price of $1,055.00 per $1,000.00 principal amount of 2016 Senior Subordinated Notes on
February 1, 2011 for a total consideration of $255.2 million in accordance with the terms of the indenture governing the 2016 Senior Subordinated Notes. We recognized an additional loss
on extinguishment of approximately $16.7 million in the fourth quarter of fiscal 2011.

On December 15, 2010, we amended our senior secured credit facility dated January 26, 2006. The amendments, among other
things,: (i) replaced the existing revolving facility with a new five year revolving facility (with higher interest rates than the existing revolving facility); (ii) extended the
maturity of term loans held by term lenders who consented to such extension; (iii) increased the interest rates payable to holders of extended term loans; and (iv) included certain other
modifications to the senior secured credit facility in connection with the foregoing.

Dividend

During December of 2010 and January and March of 2011, AMC Entertainment Inc. ("AMC Entertainment" or "AMCE") made dividend
payments to Holdings, totaling $263.1 million. Holdings used the available funds to pay the consideration for the Discount Notes due 2014 Cash Tender Offer and the redemption of all of Discount
Notes due 2014 that remained outstanding after the closing of the Cash Tender Offer and pay corporate overhead expenses incurred in the ordinary course of business.

During
September of 2010, AMCE made dividend payments to Holdings of $15.2 million, and Holdings made dividend payments to Parent, totaling $669,000. Holdings and Parent used the
available funds to make a cash interest payment on the Discount Notes due 2014 and pay corporate overhead expenses incurred in the ordinary course of business.

NCM Transactions

All of our National CineMedia, LLC ("NCM") membership units are redeemable for, at the option of NCM, cash or shares of common
stock of National CineMedia, Inc. ("NCM, Inc.") on a share-for-share basis. On August 18, 2010, we sold 6.5 million shares of common stock of
NCM, Inc., in an underwritten public offering for $16.00 per share and reduced our related investment in NCM by $36.7 million, the average carrying amount of all shares owned. Net
proceeds received on this sale were $99.8 million, after deducting related underwriting fees and professional and consulting costs of $4.2 million, resulting in a gain on sale of
$63.1 million. In addition, on September 8, 2010, we sold 155,193 shares of NCM, Inc. to the underwriters to cover over allotments for $16.00 per share and reduced our
related investment in NCM by $867,000, the average carrying amount of all shares owned. Net proceeds received on this sale were $2.4 million, after deducting related underwriting fees and
professional and consulting costs of $99,000, resulting in a gain on sale of $1.5 million.

On
March 17, 2011, NCM, Inc., as sole manager of NCM, disclosed the changes in ownership interest in NCM pursuant to the Common Unit Adjustment Agreement dated as of
February 13, 2007 ("2010 Common Unit Adjustment"). This agreement provides for a mechanism for adjusting membership units based on increases or decreases in attendance associated with theatre
additions and dispositions. Prior to the 2010 Common Unit Adjustment, we held 18,803,420 units, or a 16.98% ownership interest, in NCM as of December 30, 2010. As a result of theatre closings
and dispositions and a related decline in attendance, we elected to surrender 1,479,638 common membership units to satisfy the 2010 Common Unit Adjustment, leaving us with 17,323,782 units, or
a 15.66% ownership interest, in NCM as of March 31, 2011. We recorded the surrendered common units as a reduction to deferred revenues for exhibitor services agreement at fair value of
$25.4 million, based on a price per share of NCM, Inc. of
$17.14 on March 17, 2011, and recorded the reduction of our NCM investment at weighted average cost for Tranche 2 Investments of $25.6 million, resulting in a loss on the
surrender of the units of $207,000. The gain from the NCM, Inc. stock sales and the loss from the surrendered NCM common units are reported as Gain from NCM transactions on the Consolidated
Statements of Operations.

We believe our leadership in major metropolitan markets, superior asset quality and continuous focus on innovation and the guest
experience have positioned us well to capitalize disproportionately on trends providing momentum to the theatrical exhibition industry as a whole, particularly the mass adoption of digital and 3D
technologies. We believe we can gain additional share of wallet from the consumer by broadening our offerings to them and increasing our engagement with them. We can then enable marketers and
partners, such as NCM, to engage with our guests, deriving further financial value and benefit. We believe our management team is uniquely equipped to execute our strategy to realize these
opportunities, making us a particularly effective competitor in our industry and positioning us well for future growth. Our competitive strengths include:

Broad National Reach. Thirty-nine percent (39%) of Americans (or approximately 120 million consumers) live within 10 miles
of an
AMC theatre. This proximity and convenience, along with the affordability and diversity of our film product, drive approximately 200 million consumers into our theatres each year, or
approximately 33.3 million unique visitors annually. We believe our ability to serve a broad consumer base across numerous entertainment occasions, such as teenage socializing, romantic dates
and group events, is a competitive advantage. Our consumer reach, operating scale, access to diverse content and marketing platforms are valuable to content providers and marketers who want to access
this broad and diverse audience.

Major Market Leader. We maintain the leading market share within our markets. As of March 31, 2011, we operated in 24 of
the top
25 Designated Market Areas as defined by Nielsen Media Research ("DMAs") and had the number one or two market share in each of the top 15 DMAs, including New York City, Los
Angeles, Chicago, Philadelphia, San Francisco, Boston and Dallas. In addition, 75% of our screens were located in the top 25 DMAs and 89% were located in the top 50 DMAs. Population
growth from 2010 through 2015 is projected by Nielsen Claritas to be 4.5% in the top 25 DMAs and 4.5% in the top 50 DMAs, compared to only 3.2% in all other DMAs. Our strong presence in
the top
DMAs makes our theatres more visible and therefore strategically more important to content providers who rely on these markets for a disproportionately large share of box office receipts. According to
Rentrak, during the 52 weeks ended March 31, 2011, 59% of all U.S. box office receipts were derived from the top 25 DMAs and 75% were derived from the top 50 DMAs. In
certain of our densely populated major metropolitan markets, we believe a scarcity of attractive retail real estate opportunities enhances the strategic value of our existing theatres. We also believe
the complexity inherent in operating in these major metropolitan markets is a deterrent to other less sophisticated competitors, protecting our market share position.

We
believe that customers in our major metropolitan markets are generally more affluent and culturally diverse than those in smaller markets. Traditionally, our strong presence in these
markets has created a greater opportunity to exhibit a broad array of programming and premium formats, which we believe drives higher levels of attendance at our theatres. This has allowed us
to generate higher per screen and per theatre operating metrics. For example, our average ticket price in the United States was $8.73 for our 52 weeks ended March 31, 2011, as compared
to $7.87 for the industry as a whole for the 12 months ended March 31, 2011.

Modern, Highly Productive Theatre Circuit. We believe the combination of our strong major market presence, focus on a superior
guest experience and
core operating strategies enables us to deliver industry-leading theatre level operating metrics. For the 52 weeks ended March 31, 2011, on a pro forma basis for Kerasotes, our
theatre exhibition circuit generated attendance per average theatre of 538,000 (higher than any of our peers) revenues per average theatre of $6.7 million and operating cash flows before rent
(defined as Adjusted EBITDA before rent and G&A-Other) per average theatre of $2.2 million. Over the past five fiscal years, we invested an average of $132.4 million per year
to

improve
and expand our theatre circuit, contributing to the modern portfolio of theatres we operate today.

Leader in Deployment of Premium Formats. We also believe our strong major market presence and our highly productive theatre
circuit allow us to take
greater advantage of incremental revenue-generating opportunities associated with the premium services that will define the future of the theatrical business, including digital delivery, 3D
projection, large screen formats, such as IMAX and our proprietary ETX offering, and alternative programming. As the industry's digital conversion accelerates, we believe we have established a
differentiated leadership position in premium formats. For example, we are the world's largest IMAX exhibitor with 107 screens as of March 31, 2011, all of which are 3D enabled, and we expect
to increase our IMAX screen count to 129 by the end of fiscal year 2012. We are able to charge a premium price for the IMAX experience, which, in combination with higher attendance levels, produces
average weekly box office per print that is 300% greater than standard 2D versions of the same movie. The availability of IMAX and 3D content has increased significantly from calendar year
2005 to 2010. During this period, available 3D content increased from 3 titles to 26 titles while available IMAX content increased from 5 titles to 14 titles. Industry film grosses for available 3D
products increased from $191.0 million to approximately $3.0 billion, while industry film grosses for available IMAX products increased from $864.0 million to approximately
$3.0 billion over this time period. This favorable trend continues in calendar year 2011 with 37 3D titles and 19 IMAX titles slated to open, including highly successful franchise installments
such as Pirates of the Caribbean: On Stranger Tides, Kung Fu Panda: The Kaboom of D, Transformers: Dark of the Moon, Harry Potter and the Deathly Hallows,
Part 2 and Mission Impossible-Ghost Protocal. As reported in the May 1, 2011 issue of Movieline International, the film
release schedule for calendar year 2012 is beginning to solidify with 24 3D titles and 2 IMAX titles already
announced, including sequels of high profile franchises such as Spiderman, Men in Black, James Bond, Bourne Legacy, Batman and a 3D version of Star
Wars. We expect that additional 3D and IMAX titles will be announced as the beginning of 2012 approaches.

Innovative Growth Initiatives in Food and Beverage. We believe our theatre circuit is better positioned than our peer
competitors' to generate
additional revenue from broader and more diverse food and beverage offerings, in part due to our markets' larger, more diverse and more affluent customer base and our management's extensive experience
in guest services, specifically within the food and beverage industry. Our annual food and beverage sales exceed the domestic food service sales generated from 18 of the top 75 ranked restaurants
chains in the U.S., while representing only approximately 27% of our total revenue. To capitalize on this opportunity, we have introduced proprietary food and beverage offerings in 138 theatres as of
March 31, 2011, and we intend to deploy these offerings across our theatre circuit based on the needs and specific circumstances of each theatre. Our wide range of food and beverage offerings
feature expanded menus, enhanced concession formats and unique dine-in theatre options, which we believe appeals to a larger cross section of potential customers. For example, in fiscal
2009 we converted a small, six-screen theatre in Atlanta, Georgia to a dine-in theatre facility with full kitchen facilities, seat side services and with a separate bar and
lounge area. From fiscal 2008 to fiscal 2011, this theatre's attendance increased over 60%, revenues more than doubled, and operating cash flow and margins increased significantly. We plan to continue
to invest in one or more enhanced food and beverage offerings across 125 to 150 theatres over the next three years.

Our
current food and beverage initiatives include:



Dine-in theatre concepts at 7 locations, which feature full kitchen facilities, seat-side servers
and a separate bar and lounge area;

Concession Freshen at 13 locations, which provides a guest friendly grab and go experience and creates visual interest and
space for more products;



Better For You Merchandisers at 12 locations, addressing currently unmet guest needs by providing healthy choice
concession items; and



Made To Order Hot Foods at 125 locations, including menu choices such as curly fries, chicken tenders and
jalapeño poppers.

Strong Cash Flow Generation. We believe that our major market focus and highly productive theatre circuit have enabled us to
generate significant
cash flow provided by operating activities. For the 52 weeks ended March 31, 2011, on a pro forma basis for Kerasotes, our net cash provided by operating activities totaled
$97.0 million. For the fiscal year ended April 1, 2010, on a pro forma basis for Kerasotes, our net cash provided by operating activities totaled $295.3 million. This
strong cash flow will enable us to continue our deployment of premium formats and services and to finance planned capital expenditures without relying on the capital markets for funding. In addition,
in future years, we expect to continue to generate cash flow sufficient to allow us to grow our revenues, maintain our facilities, service our indebtedness and make dividend payments to our
stockholder.

Management Team Uniquely Positioned to Execute. Our management team has a unique combination of industry experiences and
skill-sets,
equipping them to effectively execute our strategies. Our CEO's broad experience in a number of consumer packaged goods and entertainment-related businesses expands our growth perspectives beyond
traditional theatrical exhibition and has increased our focus on providing more value to our guests. Recent additions, including a Chief Marketing Officer, heads of Food and Beverage, Programming and
Development/Real Estate and a Senior Vice President for Strategy and Strategic Partnerships, augment our deep bench of industry experience. The
expanded breadth of our management team complements the established team that is focused on operational excellence, innovation and successful industry consolidation.

Our Strategy

Our strategy is to leverage our modern theatre circuit and major market position to lead the industry in consumer-focused innovation
and financial operating metrics. The use of emerging premium formats and our focus on the guest experience give us a unique opportunity to leverage our theatre circuit and major market position across
our platform. Our primary goal is to maintain our company's and the industry's social relevance and to offer consumers distinctive, affordable and compelling out-of-home
entertainment alternatives that capture a greater share of their personal time and spend. We have a two-pronged strategy to accomplish this goal: first, drive consumer-related growth and
second, focus on operational excellence.

Drive Consumer-Related Growth

Capitalize on Premium Formats. Technical innovation has allowed us to enhance the consumer experience through premium formats
such as IMAX and 3D.
Our customers are willing to pay a premium price for this differentiated entertainment experience. When combined with our major markets' customer base, the operating flexibility of digital technology
will enhance our capacity utilization and dynamic pricing capabilities. This will enable us to achieve higher ticket prices for premium formats, and provide incremental revenue from the exhibition of
alternative content such as live concerts, sporting events, Broadway shows, opera and other non-traditional programming. We have already seen success from the Metropolitan Opera, with
respect to which, during fiscal 2011, we programmed 37 performances in over 100 theatres and charged an average ticket price of $18. Within each of our major markets, we are able to charge a premium
for these services relative to our smaller

markets.
We will continue to broaden our content offerings through the installation of additional IMAX, ETX and RealD systems and the presentation of attractive alternative content. For
example:



We have the leading market share of IMAX 3D-enabled digital projection systems. We expect to increase our IMAX screen
count to 129 by the end of fiscal year 2012. These IMAX projection systems are slated to be installed in many of our top performing locations in major U.S. markets, each of our local IMAX
installations is protected by geographic exclusivity. Available IMAX titles announced for calendar year 2011 are 19 as compared with 14 titles in calendar year 2010.



As of March 31, 2011, we had installed 2,301 digital projectors in our existing theatre base, representing a 45%
digital penetration in our theatre circuit. We intend to continue our rapid deployment of digital projectors through our arrangements with DCIP and expect to have installed over 3,800 digital
projectors by the end of fiscal year 2012. We lease our digital projection systems from DCIP and therefore do not bear the majority of the cost of the digital projector rollout. Operating a digital
theatre circuit provides numerous benefits, which include forming the foundation for 3D formats and alternative programming, allowing for more efficient film operations, lowering costs and enabling a
better, more versatile advertising platform.



To complement our deployment of digital technology, in 2006 we partnered with RealD to install their 3D enabled systems in
our theatres. As of March 31, 2011, we had 1,603 RealD, 107 IMAX and 14 ETX 3D-enabled systems. During the past year, 3D films have generated approximately 10% greater attendance and
approximately 40% greater admissions revenue than the standard 2D versions of the same film at an additional $1 to $5 per ticket. Concurrent with our digital rollout, we plan on having over 2,250
RealD screens across our theatre circuit by the end of fiscal 2012. Available 3D titles for calendar year 2011 are 37 as compared with 26 titles in calendar year 2010.



During fiscal 2010, we introduced our proprietary large-screen digital format, ETX, and as of March 31, 2011 we
operated at 14 locations. ETX features wall-to-wall screens that are 20% larger than traditional screens, a custom sound system that is three times more powerful than a
traditional auditorium, and 3D-enabled digital projection with twice the clarity of high definition. We charge a premium price for the ETX experience, which, in combination with higher attendance
levels, produces average weekly box office per print that is 140% more than standard 2D versions of the same movie. We plan to have 17 ETX large screen formats by the end of fiscal year 2012.

Broaden and Enhance Food and Beverage Offerings. To address consumer trends, we are expanding our menu of premium food and
beverage products to
include made-to-order meals, customized coffee, healthy snacks, alcohol and other gourmet products. We plan to invest across
a spectrum of enhanced food and beverage formats, from simple, less capital-intensive concession design improvements to the development of new dine-in theatre options. We have successfully
implemented our dine-in theatre offerings to rejuvenate theatres approaching the end of their useful lives as traditional movie theatres and, in some of our larger theatres to more
efficiently leverage their additional capacity. The costs of these conversions in some cases are partially covered by investments from the theatre landlord. We plan to continue to invest in one or
more enhanced food and beverage offerings across 125 to 150 theatres over the next three years.

Maximize Guest Engagement and Loyalty. In addition to differentiating the AMC Entertainment movie-going experience by deploying
new sight and sound
formats, as well as food and beverage offerings, we are also focused on creating differentiation through guest marketing. We are already the most recognized theatre exhibition brand, with almost 60%
brand awareness in the United States. We are actively marketing our own "AMC experience" message to our customers, focusing on every aspect of a customer's engagement with AMC, from the moment a guest
visits our website or purchases a

ticket
to the moment he leaves our theatre. We have also refocused our marketing to drive active engagement with our customers through a redesigned website, Facebook, Twitter and push email campaigns.
As of May 17, 2011, we had approximately 1.1 million "likes" on Facebook, and we engaged directly with our guests via close to 32 million emails in fiscal 2011. We have launched
our new fee-based guest frequency program, AMC Stubs, in late March 2011. This new program replaces Moviewatcher
Rewards, which ended the year with 1.5 million active members, many of which are converting over to AMC Stubs. Additional
marketing initiatives include:



The ongoing continuous improvements of amctheatres.com, our Interactive Voice Response ("IVR") system, and expansion of
our use of social medial channels to supplant traditional communication via newspapers with contemporary engagement platforms that offer comprehensive theatre, show time and movie-related information.
Additional means of consumer engagement are being expanded to include email, social networking, and Short Message Service ("SMS") messaging.



The addition of music, sports and other special events to transform our buildings into full-fledged
entertainment venues. This growing complement to traditional content has grown to 80 events in fiscal 2011, including the very popular Metropolitan Opera series.



Targeting film content to the ethnic/lifestyles within individual theatre trade areas, which enables us to drive
incremental traffic and create greater guest engagement. Our circuit-within-a-circuit initiative includes a number of guest profiles, including independent films, Latino,
Bollywood, Asian/Korean and Urban.

Focus on Operational Excellence

Disciplined Approach to Theatre Portfolio Management. We evaluate the potential for new theatres and, where appropriate, replace
underperforming
theatres with newer, more modern theatres that offer amenities consistent with our portfolio. We also intend to selectively pursue acquisitions where the characteristics of the location, overall
market and facilities further enhance the quality of our theatre portfolio. We presently have no current plans, proposals or understandings regarding any such acquisitions. Historically, we have
demonstrated a successful track record of integrating acquisitions such as Loews, General Cinema and Kerasotes. For example, our January 2006 acquisition of Loews combined two leading theatrical
exhibition companies, each with a long history of operating in the industry, thereby increasing the number of screens we operated by 47%.

Continue to Achieve Operating Efficiencies. We believe that the size of our theatre circuit, our major market concentration and
the breadth of our
operations will allow us to continue to achieve economies of scale and further improve operating margins. Our operating strategies are focused on the following areas:



Leveraging our scale to lower our cost of doing business without sacrificing quality or the important elements of guest
satisfaction. For example, during fiscal 2010, we reorganized our procurement function and implemented a number of other initiatives that allowed for vendor consolidation, more targeted marketing and
promotional efforts, and energy management programs that generated an aggregate annual savings of approximately $15.3 million for the 52 weeks ended March 31, 2011.



Lowering occupancy costs in many of our facilities by renegotiating rental agreements with landlords, strictly enforcing
co-tenancy provisions and effective auditing of common area billings. In fiscal 2011, we negotiated rental reductions and enforced co-tenancy provisions in 8 of our leases,
generating savings of $2.8 million.

We predominantly license "first-run" motion pictures from distributors owned by major film production companies and from
independent distributors. We license films on a film-by-film and theatre-by-theatre basis. We obtain these licenses based on several factors, including
number of seats and screens available for a particular picture, revenue potential and the location and condition of our theatres. We pay rental fees on a negotiated basis.

During
the period from 1990 to 2010, the annual number of first-run motion pictures released by distributors in the United States ranged from a low of 370 in 1995 to a high
of 634 in 2008, according to the Motion Picture Association 2009 Theatrical Market Statistics.

North
American film distributors typically establish geographic film licensing zones and generally allocate available film to one theatre within each zone. Film zones generally encompass
a radius of three to five miles in metropolitan and suburban markets, depending primarily upon population density. In film zones where we are the sole exhibitor, we obtain film licenses by selecting a
film from among those offered and negotiating directly with the distributor. As of March 31, 2011, approximately 91% of
our screens in the United States and Canada were located in film licensing zones where we are the sole exhibitor.

Our
licenses typically state that rental fees are based on either aggregate terms established prior to the opening of the picture or on a mutually agreed settlement upon the conclusion
of the picture run. Under an aggregate terms formula, we pay the distributor a specified percentage of box office receipts or pay based on a scale of percentages tied to different amounts of box
office gross. The settlement process allows for negotiation based upon how a film actually performs.

There
are several distributors which provide a substantial portion of quality first-run motion pictures to the exhibition industry. These include Paramount Pictures,
Twentieth Century Fox, Warner Bros. Distribution, Buena Vista Pictures (Disney), Sony Pictures Releasing, and Universal Pictures. Films licensed from these distributors accounted for approximately 81%
of our U.S. and Canadian admissions revenues during fiscal 2011. Our revenues attributable to individual distributors may vary significantly from year to year depending upon the commercial success of
each distributor's motion pictures in any given year. In fiscal 2011, no single distributor accounted for more than 20% of our box office admissions.

Concessions

Concessions sales are our second largest source of revenue after box office admissions. Concessions items include popcorn, soft drinks,
candy, hot dogs, premium concession items, specialty drinks, healthy choice items and made to order hot foods including menu choices such as curly fries, chicken tenders and jalapeño
poppers. Different varieties of concession items are offered at our theatres based on preferences in that particular geographic region. We have also implemented dine-in theatre concepts at
7 locations, which feature full kitchen facilities, seat-side servers and a separate bar and lounge area. Our strategy emphasizes prominent and appealing concessions counters designed for
rapid service and efficiency, including a guest friendly grab and go experience. We design our megaplex theatres to have more concessions capacity to make it easier to serve larger numbers of
customers. Strategic placement of large concessions stands within theatres increases their visibility, aids in reducing the length of lines, allows flexibility to introduce new concepts and improves
traffic flow around the concessions stands.

We
negotiate prices for our concessions products and supplies directly with concessions vendors on a national or regional basis to obtain high volume discounts or bulk rates and
marketing incentives.

Our
entertainment and dining experience at certain theatres features casual and premium upscale dine-in theatre options as well as bar and lounge areas.

As of March 31, 2011, we employed approximately 900 full-time and 17,000 part-time employees.
Approximately 40% of our U.S. theatre associates were paid the minimum wage.

Fewer
than 2% of our U.S. employees, consisting primarily of motion picture projectionists, are represented by a union, the International Alliance of Theatrical Stagehand Employees and
Motion Picture Machine Operators (and affiliated local unions). We believe that our relationship with this union is satisfactory. We consider our employee relations to be good.

Theatrical Exhibition Industry and Competition

Theatrical exhibition is the primary initial distribution channel for new motion picture releases, and we believe that the theatrical
success of a motion picture is often the most important factor in establishing the film's value in the other parts of the product life cycle (DVD, cable television and other ancillary markets).

Theatrical
exhibition has demonstrated long-term steady growth. U.S. and Canadian box office revenues increased from $5.0 billion in 1989 to $10.5 billion in
2010, driven by increases in both ticket prices and attendance. In calendar 2010, industry box office revenues for the United States and Canada were $10.5 billion, essentially unchanged from
2009.

The
following table represents information about the exhibition industry obtained from the National Association of Theatre Owners ("NATO") and Rentrak.

Calendar Year

Box Office
Revenues
(in millions)

Attendance
(in millions)

Average
Ticket
Price

Number of
Theatres

Indoor
Screens

Screens
Per
Theatre

2010

$

10,515

1,334

$

7.88

5,773

38,892

6.7

2009

10,600

1,414

7.50

5,561

38,605

6.9

2008

9,634

1,341

7.18

5,403

38,934

7.2

2007

9,632

1,400

6.88

5,545

38,159

6.9

2006

9,170

1,401

6.55

5,543

37,776

6.8

2005

8,820

1,376

6.41

5,713

37,092

6.5

There
are approximately 949 companies competing in the North American theatrical exhibition industry, approximately 549 of which operate four or more screens. Industry participants vary
substantially in size, from small independent operators to large international chains. Based on information obtained from Rentrak, we believe that the four largest exhibitors (in terms of box office
revenue) generated approximately 59% of the box office revenues in 2010. This statistic is up from 33% in 2000 and is evidence that the theatrical exhibition business in the United States and Canada
has been consolidating. According to NATO, average screens per theatre have increased from 6.5 in 2005 to 6.7 in 2010, which we believe is indicative of the industry's development of megaplex
theatres.

Our
theatres are subject to varying degrees of competition in the geographic areas in which they operate. Competition is often intense with respect to attracting patrons, licensing
motion pictures and finding new theatre sites. Where real estate is readily available, there are few barriers preventing another company from opening a theatre near one of our theatres, which may
adversely affect operations at our theatre. However, in certain of our densely populated major metropolitan markets, we believe a scarcity of attractive retail real estate opportunities enhances the
strategic value of our existing theatres. We also believe the complexity inherent in operating in these major metropolitan markets is a deterrent to other less sophisticated competitors, protecting
our market share position.

The
theatrical exhibition industry faces competition from other forms of out-of-home entertainment, such as concerts, amusement parks and sporting events, and
from other distribution

channels
for filmed entertainment, such as cable television, pay per view and home video systems, as well as from all other forms of entertainment.

Movie-going
is a compelling consumer out-of-home entertainment experience. Movie theatres currently garner a relatively small share of consumer entertainment time
and spend, leaving significant room for expansion and growth in the U.S. In addition, our industry benefits from available capacity to satisfy additional consumer demand without capital investment.

As
major studio releases have declined in recent years, we believe companies like Open Road Films could fill an important gap that exists in the market today for consumers, movie
producers and theatrical exhibitors by providing a broader availability of movies to consumers. Theatrical exhibitors are uniquely positioned to not only support, but also benefit from new
distribution companies and content providers. We believe the theatrical exhibition industry will continue to be attractive for a number of key reasons, including:

A Highly Popular and Affordable Out-of-Home Entertainment Experience. Going to the movies has been one of the most popular
and affordable out-of-home entertainment options for decades. The estimated average price of a movie ticket was $7.88 in calendar 2010, considerably less than other
out-of-home entertainment alternatives such as concerts and sporting events. In calendar 2010, attendance at indoor movie theatres in the United States and Canada was
1.3 billion. This contrasts to the 111.0 million combined annual attendance generated by professional baseball, basketball and football over the same period.

We
believe the theatrical exhibition industry will continue to be attractive for a number of key reasons, including:

Adoption of Digital Technology. The theatrical exhibition industry is well underway in its overall conversion from film-based to
digital
projection technology. This digital conversion will position the industry with lower distribution and exhibition expenses, efficient delivery of alternative content and niche programming, and premium
experiences for consumers. Digital projection also
results in a premium visual experience for patrons, and digital content gives the theatre operator greater flexibility in programming. The industry will benefit from the conversion to digital
delivery, alternative content, 3D formats and dynamic pricing models. As theatre exhibitors have adopted digital technology, the theatre circuits have shown enhanced productivity, profitability and
efficiency. Digital technology has increased attendance and average ticket prices. Digital technology also facilitates live and pre-recorded networked and single-site meetings
and corporate events in movie theatres and will allow for the distribution of live and pre-recorded entertainment content and the sale of associated sponsorships.

Long History of Steady Growth. The theatrical exhibition industry has produced steady growth in revenues over the past several
decades. In recent
years, net new build activity has slowed, and screen count has rationalized and is expected to decline in the near term before stabilizing, thereby increasing revenue per screen for existing theatres.
The combination of the popularity of movie-going, its steady long-term growth characteristics and consolidation and the industry's relative maturity makes theatrical exhibition a high cash
flow generating business today. Box office revenues in the United States and Canada have increased from $5.0 billion in 1989 to $10.5 billion in 2010, driven by increases in both ticket
prices and attendance across multiple economic cycles. The industry has also demonstrated its resilience to economic downturns; during four of the last six recessions, attendance and box office
revenues grew an average of 8.1% and 12.3%, respectively. In 2009, 32 films grossed over $100.0 million, compared to 25 in the prior year, helping to establish a new industry box office record
for the year.

Importance to Content Providers. We believe that the theatrical success of a motion picture is often the key determinant in
establishing the film's
value in the other parts of the product life cycle, such as DVD, cable television, merchandising and other ancillary markets. For each $1.00 of theatrical box office receipts, an average of $1.33 of
additional revenue is generated in the remainder of a film's product life cycle. As a result, we believe motion picture studios will continue to work cooperatively with theatrical exhibitors to ensure
the continued value of the theatrical window.

Regulatory Environment

The distribution of motion pictures is, in large part, regulated by federal and state antitrust laws and has been the subject of
numerous antitrust cases. The consent decrees resulting from one of those cases, to which we were not a party, have a material impact on the industry and us. Those consent decrees bind certain major
motion picture distributors and require the motion pictures of such distributors to be offered and licensed to exhibitors, including us, on a film-by-film and
theatre-by-theatre basis. Consequently, we cannot assure ourselves of a supply of motion pictures by entering into long-term arrangements with major distributors,
but must compete for our licenses on a film-by-film and theatre-by-theatre basis.

Our
theatres must comply with Title III of the Americans with Disabilities Act, or ADA. Compliance with the ADA requires that public accommodations "reasonably accommodate" individuals
with disabilities and that new construction or alterations made to "commercial facilities" conform to accessibility guidelines unless "structurally impracticable" for new construction or technically
infeasible for alterations. Non-compliance with the ADA could result in the imposition of injunctive relief, fines, and awards of damages to private litigants or additional capital
expenditures to remedy such noncompliance. Although we believe that our theatres are in substantial compliance with the ADA, in January 1999 the Civil Rights Division of the Department of Justice, or
the Department, filed suit against us alleging that certain of our theatres with stadium-style seating violate the ADA. In separate rulings in 2002 and 2003, the Court ruled against us in the "line of
sight" and the "non-line of sight" aspects of this case. In 2003, the Court entered a consent order and final judgment about the non-line of sight aspects of this case. On
December 5, 2008, the Ninth Circuit Court of Appeals reversed the trial court as to the appropriate remedy and remanded the case back to the trial court for findings consistent with its
decision. The Company and the Department have reached a settlement regarding the extent of betterments related to the remaining remedies required for line-of-sight violations
which the parties believe are consistent with the Ninth Circuit's decision. The trial court approved the settlement on November 29, 2010. The improvements will likely be made over a five year
term. The company has recorded a liability of $37,500 for compensation to claimants and fines related to this matter.

As
an employer covered by the ADA, we must make reasonable accommodations to the limitations of employees and qualified applicants with disabilities, provided that such reasonable
accommodations do not pose an undue hardship on the operation of our business. In addition, many of our employees

are
covered by various government employment regulations, including minimum wage, overtime and working conditions regulations.

Our
operations also are subject to federal, state and local laws regulating such matters as construction, renovation and operation of theatres as well as wages and working conditions,
citizenship, health and sanitation requirements and licensing. We believe our theatres are in material compliance with such requirements.

We
also own and operate theatres and other properties which may be subject to federal, state and local laws and regulations relating to environmental protection. Certain of these laws
and regulations may impose joint and several liability on certain statutory classes of persons for the costs of investigation or remediation of contamination, regardless of fault or the legality of
original disposal. We believe our theatres are in material compliance with such requirements.

Seasonality

Our revenues are dependent upon the timing of motion picture releases by distributors. The most marketable motion pictures are usually
released during the summer and the year-end holiday seasons. Therefore, our business is highly seasonal, with higher attendance and revenues generally occurring during the summer months
and holiday seasons. Our results of operations may vary significantly from quarter to quarter.

(d) Financial Information About Geographic Areas

For information about the geographic areas in which we operate, see Note 16Operating Segment to the Consolidated Financial Statements under
Part II Item 8 of this Annual Report on Form 10-K. During fiscal 2011, revenues from our theatre operations outside the United States accounted for 4% of our total
revenues. There are significant differences between the theatrical exhibition industry in the United States and in these international markets.

(e) Available Information.

We make available on our web site (www.amctheatres.com) under "Investor ResourcesSEC Filings" free of charge, and AMCE's annual reports on
Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports as soon as reasonably practicable after
we electronically file or furnish such material with the Securities and Exchange Commission. In addition, the public may read and copy any materials that we file with the Securities and Exchange
Commission at the Securities and Exchange Commission Public Reference Room at 100 F Street, NW, Washington,
DC 20549. The public may obtain information about the operation of the Public Reference Room by calling the Securities and Exchange Commission at 1-800-SEC-0330.

Our substantial debt could adversely affect our operations and prevent us from satisfying those debt obligations.

We have a significant amount of debt. As of March 31, 2011, we had outstanding $2,168.2 million of indebtedness, which
consisted of $615.9 million under our senior secured credit facility, $587.3 million of our senior notes ($600.0 million face amount), $899.4 million of our existing
subordinated notes and $65.7 million of existing capital and financing lease obligations, and $180.2 million would have been available for borrowing as additional senior debt under our
senior secured credit facility. As of March 31, 2011, we also had approximately $4.3 billion of undiscounted
rental payments under operating leases (with initial base terms of between 10 and 25 years). The amount of our indebtedness and lease and other financial obligations could have important
consequences to you. For example, it could:



increase our vulnerability to general adverse economic and industry conditions;



limit our ability to obtain additional financing in the future for working capital, capital expenditures, dividend
payments, acquisitions, general corporate purposes or other purposes;



require us to dedicate a substantial portion of our cash flow from operations to the payment of lease rentals and
principal and interest on our indebtedness, thereby reducing the funds available to us for operations and any future business opportunities;



limit our planning flexibility for, or ability to react to, changes in our business and the industry; and



place us at a competitive disadvantage with competitors who may have less indebtedness and other obligations or greater
access to financing.

If
we fail to make any required payment under our senior secured credit facility or to comply with any of the financial and operating covenants contained therein, we would be in default.
Lenders under our senior secured credit facility could then vote to accelerate the maturity of the indebtedness under the senior secured credit facility and foreclose upon the stock and personal
property of our subsidiaries that is pledged to secure the senior secured credit facility. Other creditors might then accelerate other indebtedness. If the lenders under the senior secured credit
facility accelerate the maturity of the indebtedness thereunder, we might not have sufficient assets to satisfy our obligations under the senior secured credit facility or our other indebtedness. Our
indebtedness under our senior secured credit facility bears interest at rates that fluctuate with changes in certain prevailing interest rates (although, subject to certain conditions, such rates may
be fixed for certain periods). If interest rates increase, we may be unable to meet our debt service obligations under our senior secured credit facility and other indebtedness.

Prior to fiscal 2007, we had reported net losses in each of the prior nine fiscal years totaling approximately $510.1 million.
For fiscal 2007, 2008, 2009, 2010 and 2011, we reported net earnings (losses) of $134.1 million, $43.4 million, $(81.2) million, $69.8 million and $(122.9) million.
If we experience losses in the future, we may be unable to meet our payment obligations while attempting to expand our theatre circuit and withstand competitive pressures or adverse economic
conditions.

We face significant competition for new theatre sites, and we may not be able to build or acquire theatres on terms favorable to us.

We anticipate significant competition from other exhibition companies and financial buyers when trying to acquire theatres, and there
can be no assurance that we will be able to acquire such theatres at reasonable prices or on favorable terms. Moreover, some of these possible buyers may be stronger financially than we are. In
addition, given our size and market share, as well as our recent experiences with the Antitrust Division of the United States Department of Justice in connection with the acquisition of Kerasotes and
prior acquisitions, we may be required to dispose of
theatres in connection with future acquisitions that we make. As a result of the foregoing, we may not succeed in acquiring theatres or may have to pay more than we would prefer to make an
acquisition.

Acquiring or expanding existing circuits and theatres may require additional financing, and we cannot be certain that we will be able to obtain new financing on favorable
terms, or at all.

Our net capital expenditures aggregated approximately $129.3 million for fiscal 2011. We estimate that our planned capital
expenditures will be between $140.0 million and $150.0 million in fiscal 2012 and will continue at approximately $120.0 million annually over the next three years. Actual capital
expenditures in fiscal 2012 may differ materially from our estimates. We may have to seek additional financing or issue additional securities to fully implement our growth strategy. We cannot be
certain that we will be able to obtain new financing on favorable terms, or at all. In addition, covenants under our existing indebtedness limit our ability to incur additional indebtedness, and the
performance of any additional theatres may not be sufficient to service the related indebtedness that we are permitted to incur.

We may be reviewed by antitrust authorities in connection with acquisition opportunities that would increase our number of theatres in markets where we have a leading market
share.

Given our size and market share, pursuit of acquisition opportunities that would increase the number of our theatres in markets where
we have a leading market share would likely result in significant review by the Antitrust Division of the United States Department of Justice, and we may be required to dispose of theatres in order to
complete such acquisition opportunities. For example, in connection with the acquisition of Kerasotes, we were required to dispose of 11 theatres located in various markets across the United States,
including Chicago, Denver and Indianapolis. As a result, we may not be able to succeed in acquiring other exhibition companies or we may have to dispose of a significant number of theatres in key
markets in order to complete such acquisitions.

The agreements governing our indebtedness contain covenants that may limit our ability to take advantage of certain business opportunities advantageous to us.

The agreements governing our indebtedness contain various covenants that limit our ability to, among other
things:

These
restrictions could limit our ability to obtain future financing, make acquisitions or needed capital expenditures, withstand economic downturns in our business or the economy in
general, conduct operations or otherwise take advantage of business opportunities that may arise.

Although
the indentures for our notes contain a fixed charge coverage test that limits our ability to incur indebtedness, this limitation is subject to a number of significant exceptions
and qualifications. Moreover, the indentures do not impose any limitation on our incurrence of capital or finance lease obligations or liabilities that are not considered "Indebtedness" under the
indentures (such as operating leases), nor do they impose any limitation on the amount of liabilities incurred by subsidiaries, if any, that might be designated as "unrestricted subsidiaries," which
are subsidiaries that we designate, that are not subject to the restrictive covenants contained in the indentures governing our notes.

Furthermore,
there are no restrictions in the indentures on our ability to invest in other entities (including unaffiliated entities) and no restrictions on the ability of our
subsidiaries to enter into agreements restricting their ability to pay dividends or otherwise transfer funds to us. Also, although the indentures limit our ability to make restricted payments, these
restrictions are subject to significant exceptions and qualifications.

We may not generate sufficient cash flow from our theatre acquisitions to service our indebtedness.

In any acquisition, we expect to benefit from cost savings through, for example, the reduction of overhead and theatre level costs, and
from revenue enhancements resulting from the acquisition. However, there can be no assurance that we will be able to generate sufficient cash flow from these acquisitions to service any indebtedness
incurred to finance such acquisitions or realize any other anticipated benefits. Nor can there be any assurance that our profitability will be improved by any one or more acquisitions. Any acquisition
may involve operating risks, such as:



the difficulty of assimilating and integrating the acquired operations and personnel into our current business;



the potential disruption of our ongoing business;



the diversion of management's attention and other resources;



the possible inability of management to maintain uniform standards, controls, procedures and policies;



the risks of entering markets in which we have little or no experience;



the potential impairment of relationships with employees;



the possibility that any liabilities we may incur or assume may prove to be more burdensome than anticipated; and



the possibility that the acquired theatres do not perform as expected.

If our cash flows prove inadequate to service our debt and provide for our other obligations, we may be required to refinance all or a portion of our existing debt or future
debt at terms unfavorable to us.

Our ability to make payments on and refinance our debt and other financial obligations and to fund our capital expenditures and
acquisitions will depend on our ability to generate substantial

operating
cash flow. This will depend on our future performance, which will be subject to prevailing economic conditions and to financial, business and other factors beyond our control.

In
addition, our notes require us to repay or refinance those notes when they come due. If our cash flows were to prove inadequate to meet our debt service, rental and other obligations
in the future, we may be required to refinance all or a portion of our existing or future debt, on or before maturity, to sell assets or to obtain additional financing. We cannot assure you that we
will be able to refinance any of our indebtedness, including our senior secured credit facility, sell any such assets or obtain additional financing on commercially reasonable terms or at all.

The
terms of the agreements governing our indebtedness restrict, but do not prohibit us from incurring additional indebtedness. If we are in compliance with the financial covenants set
forth in the senior secured credit facility and our other outstanding debt instruments, we may be able to incur substantial additional indebtedness. If we incur additional indebtedness, the related
risks that we face may intensify.

Optimizing our theatre circuit through new construction is subject to delay and unanticipated costs.

The availability of attractive site locations is subject to various factors that are beyond our control. These factors
include:



local conditions, such as scarcity of space or increase in demand for real estate, demographic changes and changes in
zoning and tax laws; and



competition for site locations from both theatre companies and other businesses.

In
addition, we typically require 18 to 24 months in the United States and Canada from the time we identify a site to the opening of the theatre. We may also experience cost
overruns from delays or other unanticipated costs. Furthermore, these new sites may not perform to our expectations.

Our investment in and revenues from NCM may be negatively impacted by the competitive environment in which NCM operates.

We have maintained an investment in NCM. NCM's in-theatre advertising operations compete with other cinema advertising
companies and other advertising mediums including, most notably, television, newspaper, radio and the Internet. There can be no guarantee that in-theatre advertising will continue to
attract major advertisers or that NCM's in-theatre advertising format will be favorably received by the theatre-going public. If NCM is unable to generate expected sales of advertising, it
may not maintain the level of profitability we hope to achieve, its results of operations and cash flows may be adversely affected and our investment in and revenues and dividends from NCM may be
adversely impacted.

We may suffer future impairment losses and theatre and other closure charges.

The opening of large megaplexes by us and certain of our competitors has drawn audiences away from some of our older, multiplex
theatres. In addition, demographic changes and competitive pressures have caused some of our theatres to become unprofitable. As a result, we may have to close certain theatres or recognize impairment
losses related to the decrease in value of particular theatres. We review long-lived assets, including intangibles, for impairment as part of our annual budgeting process and whenever
events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. We recognized non-cash impairment losses in 1996 and in each fiscal year
thereafter except for 2005. Our impairment losses of long-lived assets from continuing operations over this period aggregated to $297.8 million. Beginning fiscal 1999 through March 31,
2011, we also incurred theatre and other closure expenses, including theatre lease termination charges aggregating approximately $117.0 million. Deterioration in the performance of our theatres
could

require
us to recognize additional impairment losses and close additional theatres, which could have an adverse effect on the results of our operations. We continually monitor the performance of our
theatres, and factors such as changing consumer preferences for filmed entertainment in international markets and our inability to sublease vacant retail space could negatively impact operating
results and result in future closures, sales, dispositions and significant theatre and other closure charges prior to expiration of underlying lease agreements.

We must comply with the ADA, which could entail significant cost.

Our theatres must comply with Title III of the Americans with Disabilities Act of 1990, or ADA. Compliance with the ADA requires that
public accommodations "reasonably accommodate" individuals with disabilities and that new construction or alterations made to "commercial facilities" conform to accessibility guidelines unless
"structurally impracticable" for new construction or technically infeasible for alterations. Non-compliance with the ADA could result in the imposition of injunctive relief, fines, and an
award of damages to private litigants or additional capital expenditures to remedy such noncompliance.

On
January 29, 1999, the Civil Rights Division of the Department of Justice, or the Department, filed suit alleging that AMC Entertainment's stadium-style theatres violated the
ADA and related regulations. On December 5, 2003, the trial court entered a consent order and final judgment on non-line-of-sight issues under which AMC
Entertainment agreed to remedy certain violations at its stadium-style theatres and at certain theatres it may open in the future. Currently we estimate that betterments are required at approximately
40 stadium-style theatres. We estimate that the unpaid cost of these betterments will be approximately $13.2 million. The estimate is based on actual costs incurred on remediation work
completed to date. As to
line-of-sight matters, the trial court approved a settlement on November 29, 2010 requiring us to make settlements over a five year term at an estimated cost of
$5.0 million. The actual costs of betterments may vary based on the results of surveys of the remaining theatres. See Note 13Commitments and Contingencies to our
Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K.

We may be subject to liability under environmental laws and regulations.

We own and operate facilities throughout the United States and manage or own facilities in several foreign countries and are subject to
the environmental laws and regulations of those jurisdictions, particularly laws governing the cleanup of hazardous materials and the management of properties. We might in the future be required to
participate in the cleanup of a property that we own or lease, or at which we have been alleged to have disposed of hazardous materials from one of our facilities. In certain circumstances, we might
be solely responsible for any such liability under environmental laws, and such claims could be material.

We may not be able to generate additional ancillary revenues.

We intend to continue to pursue ancillary revenue opportunities such as advertising, promotions and alternative uses of our theatres
during non-peak hours. Our ability to achieve our business objectives may depend in part on our success in increasing these revenue streams. Some of our U.S. and Canadian competitors have
stated that they intend to make significant capital investments in digital advertising delivery, and the success of this delivery system could make it more difficult for us to compete for advertising
revenue. In addition, in March 2005 we contributed our cinema screen advertising business to NCM. As such, although we retain board seats and an ownership interest in NCM, we do not control this
business, and therefore do not control our revenues attributable to cinema screen advertising. We cannot assure you that we will be able to effectively generate additional ancillary revenue and our
inability to do so could have an adverse effect on our business and results of operations.

Our current and future performance depends to a significant degree upon the retention of our senior management team and other key
personnel. The loss or unavailability to us
of any member of our senior management team or a key employee could have a material adverse effect on our business, financial condition and results of operations. We cannot assure you that we would be
able to locate or employ qualified replacements for senior management or key employees on acceptable terms.

Risks Related to Our Industry

We have no control over distributors of the films and our business may be adversely affected if our access to motion pictures is limited or delayed.

We rely on distributors of motion pictures, over whom we have no control, for the films that we exhibit. Major motion picture
distributors are required by law to offer and license film to exhibitors, including us, on a film-by-film and theatre-by-theatre basis. Consequently, we
cannot assure ourselves of a supply of motion pictures by entering into long-term arrangements with major distributors, but must compete for our licenses on a
film-by-film and theatre-by-theatre basis. Our business depends on maintaining good relations with these distributors, as this affects our ability to
negotiate commercially favorable licensing terms for first-run films or to obtain licenses at all. Our business may be adversely affected if our access to motion pictures is limited or
delayed because of deterioration in our relationships with one or more distributors or for some other reason. To the extent that we are unable to license a popular film for exhibition in our theatres,
our operating results may be adversely affected.

We depend on motion picture production and performance.

Our ability to operate successfully depends upon the availability, diversity and appeal of motion pictures, our ability to license
motion pictures and the performance of such motion pictures in our markets. We license first-run motion pictures, the success of which has increasingly depended on the marketing efforts of
the major motion picture studios. Poor performance of, or any disruption in the production of these motion pictures (including by reason of a strike or lack of adequate financing), or a reduction in
the marketing efforts of the major motion picture studios, could hurt our business and results of operations. Conversely, the successful performance of these motion pictures, particularly the
sustained success of any one motion picture, or an increase in effective marketing efforts of the major motion picture studios, may generate positive results for our business and operations in a
specific fiscal quarter or year that may not necessarily be indicative of, or comparable to, future results of operations. In addition, a change in the type and
breadth of movies offered by motion picture studios may adversely affect the demographic base of moviegoers.

We are subject, at times, to intense competition.

Our theatres are subject to varying degrees of competition in the geographic areas in which we operate. Competitors may be national
circuits, regional circuits or smaller independent exhibitors. Competition among theatre exhibition companies is often intense with respect to the following factors:



Attracting patrons. The competition for patrons is
dependent upon factors such as the availability of popular motion pictures, the location and number of theatres and screens in a market, the comfort and quality of the theatres and pricing. Many of
our competitors have sought to increase the number of screens that they operate. Competitors have built or may be planning to build theatres in certain areas where we operate, which could result in
excess capacity and increased competition for patrons.

Licensing motion pictures. We believe that the principal
competitive factors with respect to film licensing include licensing terms, number of seats and screens available for a particular picture, revenue potential and the location and condition of an
exhibitor's theatres.



Low barriers to entry. We must compete with exhibitors and
others in our efforts to locate and acquire attractive sites for our theatres. In areas where real estate is readily available, there are few barriers to entry that prevent a competing exhibitor from
opening a theatre near one of our theatres.

The
theatrical exhibition industry also faces competition from other forms of out-of-home entertainment, such as concerts, amusement parks and
sporting events and from other distribution channels for filmed entertainment, such as cable television, pay per view and home video systems and from other forms of in-home entertainment.

Industry-wide screen growth has affected and may continue to affect the performance of some of our theatres.

In recent years, theatrical exhibition companies have emphasized the development of large megaplexes, some of which have as many as 30
screens in a single theatre. The industry-wide strategy of aggressively building megaplexes generated significant competition and rendered many older, multiplex theatres obsolete more
rapidly than expected. Many of these theatres are under long-term lease commitments that make closing them financially burdensome, and some companies have elected to continue operating
them notwithstanding their lack of profitability. In other instances, because theatres are typically limited use design facilities, or for other reasons, landlords have been willing to make rent
concessions to keep them open. In recent years many older theatres that had closed are being reopened by small theatre operators and in some instances by sole proprietors that are able to negotiate
significant rent and other concessions from landlords. As a result, there was growth in the number of screens in the U.S. and Canadian exhibition industry from 2005 to 2008. This has affected and may
continue to affect the performance of some of our theatres. The number of screens in the U.S. and Canadian exhibition industry slightly declined from 2008 to 2010.

An increase in the use of alternative film delivery methods or other forms of entertainment may drive down our attendance and limit our ticket prices.

We compete with other film delivery methods, including network, syndicated cable and satellite television, DVDs and video cassettes, as
well as video-on-demand, pay-per-view services and downloads via the Internet. We also compete for the public's leisure time and disposable income with
other forms of entertainment, including sporting events, amusement parks, live music concerts, live theatre and restaurants. An increase in the popularity of these alternative film delivery methods
and other forms of entertainment could reduce attendance at our theatres, limit the prices we can charge for admission and materially adversely affect our business and results of operations.

Our results of operations may be impacted by shrinking video release windows.

Over the last decade, the average video release window, which represents the time that elapses from the date of a film's theatrical
release to the date a film is available on DVD, an important downstream market, has decreased from approximately six months to approximately three to four months. If patrons choose to wait for a DVD
release rather than attend a theatre for viewing the film, it may adversely impact our business and results of operations, financial condition and cash flows. Several major film studios are currently
testing a premium video on demand product released in homes approximately 60 days after a movie's theatrical debut, which could cause the release window to shrink further. We cannot assure you
that this release window, which is determined by the film studios, will not shrink further or be eliminated altogether, which could have an adverse impact on our business and results of operations.

The industry is in the process of converting film-based media to digital-based media. We, along with some of our
competitors, have commenced a roll-out of digital equipment for exhibiting feature films and plan to continue the roll-out through our joint venture DCIP. However, significant
obstacles exist that impact such a roll-out plan, including the cost of digital projectors and the supply of projectors by manufacturers. During fiscal 2010, DCIP completed its formation
and $660.0 million funding to facilitate the financing and deployment of digital technology in our theatres. During March of 2011, DCIP completed additional financing of $220.0 million,
which we believe will allow us to complete our planned digital deployments.

General political, social and economic conditions can reduce our attendance.

Our success depends on general political, social and economic conditions and the willingness of consumers to spend money at movie
theatres. If going to motion pictures becomes less popular or consumers spend less on concessions, which accounted for 27% of our revenues in fiscal 2011, our operations could be adversely affected.
In addition, our operations could be adversely affected if consumers' discretionary income falls as a result of an economic downturn. Political events, such as terrorist attacks, could cause people to
avoid our theatres or other public places where large crowds are in attendance.

Item 1B. Unresolved Staff Comments.

None.

Item 2. Properties.

The following table sets forth the general character and ownership classification of our theatre circuit, excluding unconsolidated
joint ventures and managed theatres, as of March 31, 2011:

Property Holding Classification

Theatres

Screens

Owned

25

193

Leased pursuant to ground leases

6

73

Leased pursuant to building leases

321

4,766

Total

352

5,032

Our
theatre leases generally have initial terms ranging from 15 to 20 years, with options to extend the lease for up to 20 additional years. The leases typically require
escalating minimum annual rent payments and additional rent payments based on a percentage of the leased theatre's revenue above a base amount and require us to pay for property taxes, maintenance,
insurance and certain other property-related expenses. In some instances our escalating minimum annual rent payments are contingent upon increases in the consumer price index. In some cases, our
rights as tenant are subject and subordinate to the mortgage loans of lenders to our lessors, so that if a mortgage were to be foreclosed, we could lose our lease. Historically, this has never
occurred.

We
lease our corporate headquarters in Kansas City, Missouri.

Currently,
the majority of the concessions, 35 mm projectors, seating and other equipment required for each of our theatres are owned. The majority of our digital projection equipment is
leased from DCIP.

Please
refer to page 5 for the geographic locations of our Theatrical Exhibition circuit as of March 31, 2011. See Note 4Property to the audited Consolidated
Financial Statements included elsewhere in this Annual Report on Form 10-K.

Pursuant to General Instruction G(2) to Form 10-K and Rule 12b-23 under the Securities
Exchange Act of 1934, as amended, the information required to be furnished by us under this Part I, Item 3 (Legal Proceedings) is incorporated by reference to the information contained
in Note 13Commitments and Contingencies to the Consolidated Financial Statements included in Part II, Item 8 on this Annual Form 10-K.

Our common equity consists of Common Stock. There is currently no established public trading market for our Common Stock.

Common Stock

On June 1, 2011, there was one stockholder of record of our Common Stock, AMC Entertainment Holdings, Inc.

On
October 2, 2008 and March 24, 2009, AMCE used cash on hand to pay dividend distributions to its stockholder, Holdings, in aggregate amounts of $18,420,000 and
$17,569,000, respectively. Holdings and Parent used the available funds to make cash interest payments on the Senior Discount Notes due 2014, repurchase treasury stock and make payments related to
liability classified options, and pay corporate expenses incurred in the ordinary course of business.

During
April and May of 2009, AMCE made dividend payments to its stockholder, Holdings, and Holdings made dividend payments to its stockholder, Parent, totaling $300,000,000, which were
treated as a reduction of additional paid-in capital. Parent made payments to purchase term loans and reduced the principal balance of its Parent Term Loan Facility from $466,936,000 to
$193,290,000 with a portion of the dividend proceeds.

During
September of 2009 and March of 2010, AMCE used cash on hand to pay a dividend distribution to Holdings in an aggregate amount of $15,351,000 and $14,630,000, respectively.
Holdings and Parent used the available funds to make a cash interest payment on the Holdco Notes and pay corporate overhead expenses incurred in the ordinary course of business.

During
September of 2010, AMCE used cash on hand to pay a dividend distribution to Holdings in an aggregate amount of $15,184,000. Holdings and Parent used the available funds to make a
cash interest payment on the 12% Senior Discount Notes due 2014 and pay corporate overhead expenses incurred in the ordinary course of business.

During
December of 2010 and January 2011, AMCE used cash on hand to pay a dividend distribution to Holdings in an aggregate amount of $185,034,000 and $76,141,000, respectively. Holdings
used the available funds to make a cash payment related to a tender offer for the 12% Senior Discount Notes due 2014.

During
March of 2011, AMCE used cash on hand to pay a dividend distribution to Holdings in an aggregate amount of $1,899,000. Holdings and Parent used the available funds to pay
corporate overhead expenses incurred in the ordinary course of business.

Issuer Purchase of Equity Securities

There were no repurchases of AMCE Common Stock during the thirteen weeks ended March 31, 2011.

All
fiscal years presented includes earnings and losses from discontinued operations related to 44 theatres in Mexico that were sold during fiscal 2009.
Fiscal 2007 includes losses from discontinued operations related to five theatres in Japan that were sold during fiscal 2006 and five theatres in Iberia that were sold during fiscal 2007.

(3)

Fiscal
2008 includes 53 weeks. All other years have 52 weeks.

(4)

Includes
consolidated theatres only.

(5)

During
fiscal 2011, fiscal 2010, fiscal 2009 and fiscal 2008, equity in earnings, including cash distributions from NCM, were $32,851,000, $34,436,000,
$27,654,000 and $22,175,000, respectively. During fiscal 2008, equity in (earnings) losses of non-consolidated entities includes a gain of $18,751,000 from the sale of Hoyts General Cinema
South America and during fiscal 2007 a gain of $238,810,000 related to the NCM, Inc. initial public offering.

(6)

Includes
gain of $15,977,000 for the 53 weeks ended April 3, 2008 from the sale of our investment in Fandango, Inc. Includes interest
income on temporary cash investments of $17,258,000 for the 52 weeks ended March 29, 2007.

(7)

Includes
theatre and other closure expense (income) for fiscal 2011, 2010, 2009, 2008 and 2007 of $60,763,000, $2,573,000, $(2,262,000), $(20,970,000) and
$9,011,000, respectively. In the fourth quarter of fiscal 2011, the Company permanently closed 73 underperforming screens in six theatre locations while continuing to operate 89 screens at these
locations, and discontinued development of and ceased use of certain vacant and under-utilized retail space at four other theatres, resulting in a charge of $55,015,000 for theatre and other closure
expense.

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion relates to the audited financial statements of AMC Entertainment Inc., included elsewhere in this
Form 10-K. This discussion contains forward-looking statements. Please see "Forward-Looking Statements" for a discussion of the risks, uncertainties and assumptions relating to
these statements.

Overview

We are one of the world's leading theatrical exhibition companies. As of March 31, 2011, we owned, operated or had interests in
360 theatres and 5,128 screens with 99%, or 5,073, of our screens in the U.S. and Canada, and 1%, or 55 of our screens in China (Hong Kong), France and the United Kingdom.

During
the fifty-two weeks ended March 31, 2011, we acquired 92 theatres with 928 screens from Kerasotes in the U.S. In connection with the acquisition of Kerasotes,
we divested of 11 theatres with 142 screens as required by the Antitrust Division of the United States Department of Justice and acquired two theatres with 26 screens that were received in exchange
for three of the divested theatres above with 43 screens. We also permanently closed 22 theatres with 144 screens in the U.S. and temporarily closed and reopened 41 screens at four theatres in the
U.S. as part of a remodeling project to allow for dine-in theatres at these locations. We permanently closed 73 underperforming screens at 6 theatre locations in the U.S and Canada and
continue to operate 89 screens at these locations. We opened one new managed theatre with 14 screens in the U.S. and acquired one theatre with 6 screens in the U.S. in the ordinary course of business.

Our
Theatrical Exhibition revenues are generated primarily from box office admissions and theatre concession sales. The balance of our revenues are generated from ancillary sources,
including on-screen advertising, rental of theatre auditoriums, fees and other revenues generated from the sale of gift cards and packaged tickets, on-line ticket fees and
arcade games located in theatre lobbies.

Box
office admissions are our largest source of revenue. We predominantly license "first-run" motion pictures from distributors owned by major film production companies and
from independent distributors. We license films on a film-by-film and theatre-by-theatre basis. Film exhibition costs are accrued based on the
applicable admissions revenues and estimates of the final settlement pursuant to our film licenses. Licenses that we enter into typically state that rental fees are based on either aggregate terms
established prior to the opening of the picture or on a mutually agreed settlement upon the conclusion of the picture run. Under an aggregate terms formula, we pay the distributor a specified
percentage of box office gross or pay based on a scale of percentages tied to different

amounts
of box office gross. The settlement process allows for negotiation based upon how a film actually performs.

Concessions
sales are our second largest source of revenue after box office admissions. Concessions items include popcorn, soft drinks, candy, hot dogs, premium concession items,
specialty drinks, healthy choice items and made to order hot foods including menu choices such as curly fries, chicken tenders and jalapeño poppers. Different varieties of concession
items are offered at our theatres based on preferences in that particular geographic region. We have also implemented dine-in theatre concepts at 7 locations, which feature full kitchen
facilities, seat-side servers and a separate bar and lounge area. Our strategy emphasizes prominent and appealing concessions counters designed for rapid service and efficiency including a
guest friendly grab and go experience. We design our theatres to have more concessions capacity to make it easier to serve larger numbers of customers. Strategic placement of large concessions stands
within theatres increases their visibility, aids in reducing the length of lines, allows flexibility to introduce new concepts and improves traffic flow around the concessions stands.

Our
revenues are dependent upon the timing and popularity of motion picture releases by distributors. The most marketable motion pictures are usually released during the summer and the
year-end holiday seasons. Therefore, our business is highly seasonal, with higher attendance and revenues generally occurring during the summer months and holiday seasons. Our results of
operations will vary significantly from quarter to quarter.

We
have a guest frequency program, AMC Stubs, which allows members to earn $10 for each $100 purchase completed at our theatres. Amounts
earned are redeemable by members on future purchases at our theatres. The value of amounts earned are included in deferred revenues and income and recorded as a reduction in admissions and concessions
revenues at the time the amounts are earned, based on the selling price of awards that are projected to be redeemed. Earned awards must be redeemed no later than 90 days from the date of
issuance. We account for membership fee revenue for our guest frequency program on a deferred basis, net of estimated refunds, whereby revenue is recognized ratably over the one-year
membership period.

During
fiscal 2011, films licensed from our six largest distributors based on revenues accounted for approximately 81% of our U.S. and Canada admissions revenues. Our revenues
attributable to individual distributors may vary significantly from year to year depending upon the commercial success of each distributor's motion pictures in any given year.

During
the period from 1990 to 2010, the annual number of first-run motion pictures released by distributors in the United States ranged from a low of 370 in 1995 to a high
of 634 in 2008, according to the Motion Picture Association of America 2010 MPAA Theatrical Market Statistics. The number of digital 3D films released annually increased to a high of 25 in 2010 from a
low of 0 during this same time period.

We
continually upgrade the quality of our theatre circuit by adding new screens through new builds (including expansions) and acquisitions and by disposing of older screens through
closures and sales. We are an industry leader in the development and operation of theatres, typically our theatres have 12 or more screens and offer amenities to enhance the movie-going experience,
such as stadium seating providing unobstructed viewing, digital sound and enhanced seat design. We have increased our 3D
enabled screens by 1,128 to 1,603 screens and our IMAX screens by 26 to 107 screens during the fifty-two weeks ended March 31, 2011; and as of March 31, 2011,
approximately 33.6% of our screens were 3D enabled screens and approximately 2.1% of our screens were IMAX 3D enabled screens.

We account for stock-based employee compensation arrangements using the fair value method. The fair value of each stock option was
estimated on the grant date using the Black-Scholes option pricing model based on assumptions regarding the following: common stock value on the grant date, risk-free interest rate,
expected term, expected volatility, and dividend yield. We have elected to use the simplified method for estimating the expected term of "plain vanilla" share option grants as we do not have enough
historical experience to provide a reasonable estimate. Compensation cost is calculated on the date of the grant and then amortized over the vesting period.

We
granted 38,876.72873 options on December 23, 2004, 600 options on January 26, 2006, 15,980.45 options on March 6, 2009, and 4,786 options on May 28, 2009
to employees to acquire our common stock. The fair value of these options on their respective grant dates was $22,373,000, $138,000, $2,069,000 and $650,000, respectively. All of these options
currently outstanding are equity classified.

During
fiscal 2011, we granted 6,507 options and 6,856 shares of restricted stock. The fair value of these options and restricted shares on their respective grant dates was approximately
$1,919,000 and $5,156,000, respectively. All of these options currently outstanding are equity classified.

The
common stock value used to estimate the fair value of each option on the March 6, 2009 grant date was based upon a contemporaneous valuation reflecting market conditions as of
January 1, 2009, a purchase of 2,542 shares by Parent for $323.95 per share from our former Chief Executive Officer pursuant to his Separation and General Release Agreement dated
February 23, 2009 and a sale of 385.862 shares by Parent to our current Chief Executive Officer pursuant to his Employment Agreement dated February 23, 2009 for $323.95 per share.

The
common stock value of $339.59 per share used to estimate the fair value of each option on the May 28, 2009 grant date was based upon a valuation prepared by management on
behalf of the
Compensation Committee of the Board of Directors. Management chose not to obtain a contemporaneous valuation performed by an unrelated valuation specialist as management believed that the valuation
obtained at January 1, 2009 and the subsequent stock sales and purchases were recent and could easily be updated and rolled forward without engaging a third party and incurring additional
costs. Additionally, management considered that the number of options granted generated a relatively low amount of annual expense over 5 years ($130,100) and that any differences in other
estimates of fair value would not be expected to materially impact the related annual expense. The common stock value was estimated based on current estimates of annual operating cash flows multiplied
by the current average peer group multiple for similar publicly traded competitors of 6.7x less net indebtedness, plus the current fair value of our investment in NCM. Management compared the
estimated stock value of $339.59 per share with the $323.95 value per share discussed above related to the March 6, 2009 option grant and noted the overall increase in value was due the
following:

March 6, 2009 grant value per share

$

323.95

Decline in net indebtedness

20.15

Increase in value of investment in NCM

37.10

Increase due to peer group multiple

47.89

Decrease in annual operating cash flows

(89.50

)

May 28, 2009 grant value per share

$

339.59

The
common stock value of $752 per share used to estimate the fair value of each option and restricted share on July 8, 2010 was based upon a contemporaneous
valuation reflecting market conditions. The total estimated grant date fair value for 5,484 shares of restricted stock (time vesting) and 1,372 shares of restricted stock (performance vesting, where
the performance targets were

established
at the grant date following ASC 718-10-55-95) was based on $752 per share and was $4,124,000 and $1,032,000, respectively. The estimated grant date fair
value of the options granted on 5,484 shares under the 2010 Equity Incentive Plan was $293.72 per share, or $1,611,000, and was determined using the Black-Sholes option-pricing model. The estimated
grant date fair value of the options granted on 1,023 shares under the 2004 Stock Option Plan was $300.91 per share, or $308,000, and was determined using the Black-Sholes option-pricing model. The
option exercise price for these grants were $752 per share, and the estimated fair value of the shares were $752, resulting in $0 intrinsic value for the option grants. As of March 31, 2011,
there was approximately $6,379,000 of total estimated unrecognized compensation cost related to nonvested stock-based compensation arrangements under both the 2010 Equity Incentive Plan and the 2004
Stock Option Plan.

Significant Events

On March 31, 2011, Marquee Holdings Inc., a direct, wholly-owned subsidiary of Parent and a holding company, the sole
asset of which consisted of the capital stock of AMCE, was merged with and into Parent, with Parent continuing as the surviving entity. As a result of the merger, AMCE became a direct subsidiary of
Parent.

During
the fourth quarter of our fiscal year ending March 31, 2011, we evaluated excess capacity and vacant and under-utilized retail space throughout our theatre circuit. On
March 28, 2011, management decided to permanently close 73 underperforming screens and auditoriums in six theatre locations in the United States and Canada while continuing to operate 89
screens at these locations. The permanently closed screens are physically segregated from the screens that will remain in operation and access to the closed space is restricted. Additionally,
management decided to discontinue development of and cease use of (including for storage) certain vacant and under-utilized retail space at four other theatres in the United States and the United
Kingdom. As a result of closing the screens and auditoriums and discontinuing the development and use of the other spaces, we recorded a charge of $55,015,000 for theatre and other closure expense,
which is included in operating expense in the Consolidated Statements of Operations during the fiscal year ending March 31, 2011. The charge to theatre and other closure expense reflects the
discounted contractual amounts of the existing lease obligations of $53,561,000 for the remaining 7 to 13 year terms of the leases as well as expenses incurred for related asset removal and
shutdown costs of $1,454,000. A significant portion of each of the affected properties will be closed and no longer used. The charges to theatre and other closure expense do not result in any new,
increased or accelerated obligations for cash payments related to the underlying long-term operating lease agreements. We expect that the estimated future savings in rent expense and
variable operating expenses as a result of our exit plan and from operating these ten theatres in a more efficient manner will exceed the estimated loss in attendance and revenues that we may
experience related to the closed auditoriums.

In
addition to the auditorium closures, we permanently closed 22 theatres with 144 screens in the U.S. during the fifty-two weeks ended March 31, 2011. We recorded
$5,748,000 for theatre and other closure expense, which is included in operating expense in the Consolidated Statements of Operations, due primarily to the remaining lease terms of 5 theatre closures
and accretion of the closure liability related to theatres closed during prior periods. Of the theatre closures in fiscal 2011, 9 theatres with 35 screens are owned properties with no related lease
obligation; 7 theatres with 67 screens had leases that were allowed to expire; a single screen theatre with a management agreement was allowed to expire; and 5 theatres with 41 screens were closed
with remaining lease terms in excess of one month. Reserves for leases that have not been terminated are recorded at the present value of the future contractual commitments for the base rents, taxes
and common area maintenance.

On December 15, 2010, we completed the offering of $600,000,000 aggregate principal amount of our 9.75% Senior Subordinated Notes due 2020 (the "Notes due
2020"). Concurrently with the initial Notes due 2020 offering, we launched a cash tender offer and consent solicitation for any and all of our then outstanding $325,000,000 aggregate principal amount
11% Senior Subordinated Notes due 2016 ("Notes due 2016") at a purchase price of $1,031 plus a $30 consent fee for each $1,000 of principal amount of currently outstanding Notes due 2016 validly
tendered and accepted by us on or before the early tender date (the "Cash Tender Offer"). We used the net proceeds from the issuance of the Notes due 2020 to pay the consideration for the Cash Tender
Offer plus accrued and unpaid interest on $95,098,000 principal amount of Notes due 2016 validly tendered. We recorded a loss on extinguishment related to the Cash Tender Offer of $7,631,000 in Other
expense during the fifty-two weeks ended March 31, 2011, which included previously capitalized deferred financing fees of $1,681,000, a tender offer and consent fee paid to the
holders of $5,801,000 and other expenses of $149,000. We redeemed the remaining $229,902,000 aggregate principal amount outstanding Notes due 2016 at a price of $1,055 per $1,000 principal amount on
February 1, 2011 in accordance with the terms of the indenture. We recorded a loss on extinguishment related to the Cash Tender Offer of $16,701,000 in Other expense during the
fifty-two weeks ended March 31, 2011, which included previously capitalized deferred financing fees of $3,958,000, a tender offer and consent fee paid to the holders of $12,644,000
and other expenses of $99,000.

Concurrently
with the Notes due 2020 offering on December 15, 2010, Holdings launched a cash tender offer and consent solicitation for any and all of its outstanding $240,795,000
aggregate principal amount (accreted value) of its 12% Senior Discount Notes due 2014 ("Discount Notes due 2014") at a purchase price of $797 plus a $30 consent fee for each $1,000 face amount (or
$792.09 accreted value) of currently outstanding Discount Notes due 2014 validly tendered and accepted by Holdings. We used
cash on hand to make a dividend payment of $185,034,000 on December 15, 2010 to our stockholder, Holdings, which was treated as a reduction of additional paid-in capital. Holdings
used the funds received from us to pay the consideration for the Discount Notes due 2014 cash tender offer plus accrued and unpaid interest on $170,684,000 principal amount (accreted value) of the
Discount Notes due 2014 validly tendered. Holdings redeemed the remaining $70,111,000 (accreted value) outstanding Discount Notes due 2014 at a price of $823.77 per $1,000 face amount (or $792.09
accreted value) on January 3, 2011 using funds from an additional dividend received from us of $76,141,000.

On
December 15, 2010, we entered into a third amendment to our Senior Secured Credit Agreement dated as of January 26, 2006 to, among other things: (i) extend the
maturity of the term loans held by accepting lenders of $476,597,000 aggregate principal amount of term loans from January 26, 2013 to December 15, 2016 and to increase the interest rate
with respect to such term loans, (ii) replace our existing revolving credit facility with a new five-year revolving credit facility (with higher interest rates and a longer maturity
than the existing revolving credit facility), and (iii) amend certain of our existing covenants therein. We recorded a loss on the modification of our Senior Secured Credit Agreement of
$3,656,000 in Other expense during the fifty-two weeks ended March 31, 2011, which included third party modification fees and other expenses of $3,289,000 and previously capitalized
deferred financing fees related to the revolving credit facility of $367,000.

All
of our NCM membership units are redeemable for, at the option of NCM, cash or shares of common stock of NCM, Inc. on a share-for-share basis. On
August 18, 2010, we sold 6,500,000 shares of common stock of NCM, Inc., in an underwritten public offering for $16.00 per share and reduced our related investment in NCM by
$36,709,000, the average carrying amount of all shares owned. Net proceeds received on this sale were $99,840,000, after deducting related underwriting fees and professional and consulting costs of
$4,160,000, resulting in a gain on sale of $63,131,000. In addition, on September 8, 2010, we sold 155,193 shares of NCM, Inc. to the underwriters to cover over allotments for
$16.00 per share and reduced our related investment in NCM by $867,000, the average carrying amount of all shares owned. Net proceeds received on this sale were $2,384,000, after

deducting
related underwriting fees and professional and consulting costs of $99,000, resulting in a gain on sale of $1,517,000.

On
March 17, 2011, NCM, Inc., as sole manager of NCM, disclosed the changes in ownership interest in NCM pursuant to the Common Unit Adjustment Agreement dated as of
February 13, 2007 ("2010 Common Unit Adjustment"). This agreement provides for a mechanism for adjusting membership units based on increases or decreases in attendance associated with theatre
additions and dispositions. Prior to the 2010 Common Unit Adjustment, we held 18,803,420 units, or a 16.98% ownership interest, in NCM as of December 30, 2010. As a result of theatre
closings and dispositions and a related decline in attendance, we elected to surrender 1,479,638 common membership units to satisfy the 2010 Common Unit Adjustment, leaving us with
17,323,782 units, or a 15.66% ownership interest, in NCM as of March 31, 2011. We recorded the surrendered common units as a reduction to deferred revenues for exhibitor services
agreement at fair value of $25,361,000, based on a price per share of NCM, Inc. of $17.14 on March 17, 2011 and recorded the reduction of the Company's NCM investment at weighted
average cost for Tranche 2 Investments of $25,568,000, resulting in a loss on the surrender of the units of $207,000. The gain from the NCM, Inc. stock sales and the loss from the
surrendered NCM common units are reported as Gain from NCM transactions on the Consolidated Statements of Operations.

On
May 24, 2010, we completed the acquisition of 92 theatres and 928 screens from Kerasotes Showplace Theatres, LLC ("Kerasotes"). Kerasotes operated 95
theatres and 972 screens in mid-sized, suburban and metropolitan markets, primarily in the Midwest. More than three quarters of the Kerasotes theatres feature stadium seating and almost
90 percent have been built since 1994. The purchase price for the Kerasotes theatres paid in cash at closing, was $276,798,000, net of cash acquired, and was subject to working capital and
other purchase price adjustments. We paid working capital and other purchase price adjustments of $3,808,000 during the second quarter of fiscal 2011, based on the final closing date working capital
and deferred revenue amounts, and have included this amount as part of the total purchase price. The acquisition of Kerasotes significantly increased our size. Accordingly, results of operations for
the fifty-two weeks ended March 31, 2011, which include forty-four weeks of operations of the theatres we acquired, are not comparable to our results for the
fifty-two weeks ended April 1, 2010. For additional information about the Kerasotes acquisition, see Note 2Acquisition to our Consolidated Financial Statements
under Part II Item 8. of this Annual Report on Form 10-K.

On
March 10, 2010, Digital Cinema Implementation Partners, LLC ("DCIP") completed its financing transactions for the deployment of digital projection systems to nearly
14,000 movie theatre screens across North America, including screens operated or managed by the Company, Regal Entertainment Group and Cinemark Holdings, Inc. At closing, we contributed 342
projection systems that we owned to DCIP, which we recorded at estimated fair value as part of an additional investment in DCIP of $21,768,000. We also made cash investments in DCIP of $840,000 at
closing and DCIP made a distribution of excess cash to us after the closing date and prior to fiscal 2010 year-end of $1,262,000. We recorded a loss on contribution of the 342
projection systems of $563,000, based on the difference between estimated fair value and our carrying value on the date of contribution. On March 26, 2010, we acquired 117 digital projectors
from third party lessors for $6,784,000 and sold them together with seven digital projectors that we owned to DCIP for $6,570,000. We recorded a loss on the sale of these 124 systems to DCIP of
$697,000. As of March 31, 2011, we operated 2,301 digital projection systems leased from DCIP pursuant to operating leases and anticipate that we will have deployed over 3,800 of these systems
in our existing theatres by the end fiscal 2012.

The
additional digital projection systems will allow us to add additional 3D enabled screens to our circuit where we are generally able to charge a higher admission price than 2D. The
digital projection systems leased from DCIP and its affiliates will replace most of our existing 35 millimeter projection systems in our U.S. theatres. We are examining the estimated depreciable lives
for our existing 35

millimeter
projection systems, with a net book value of $5,700,000 as of March 31, 2011, and have adjusted the depreciable lives in order to accelerate the depreciation of the applicable
existing 35 millimeter projection systems, so that such systems are fully depreciated at the end of the digital projection system deployment timeframe. We currently estimate that the depreciation
expense related to these assets as a result of the acceleration will be $3,800,000, $1,500,000, and $400,000 in fiscal years
2012, 2013, and 2014. Upon full deployment of the digital projection systems, we expect the cash rent expense of such equipment to approximate $4,500,000, annually, and the deferred rent expense to
approximate $5,500,000, annually, which will be recognized in our Consolidated Statements of Operations as operating expense.

On
June 9, 2009, we completed the offering of $600,000,000 aggregate principal amount of our 8.75% Senior Notes due 2019 (the "Notes due 2019"). Concurrently with the notes
offering, we launched a cash tender offer and consent solicitation for any and all of our then outstanding $250,000,000 aggregate principal amount of 85/8% Senior Notes due 2012 (the
"Fixed Notes due 2012") at a purchase price of $1,000 plus a $30 consent fee for each $1,000 of principal amount of currently outstanding Fixed Notes due 2012 validly tendered and accepted by us on or
before the early tender date (the "Cash Tender Offer"). We used the net proceeds from the issuance of the Notes due 2019 to pay the consideration for the Cash Tender Offer plus accrued and unpaid
interest on the $238,065,000 principal amount of the Fixed Notes due 2012. We recorded a loss on extinguishment related to the Cash Tender Offer of $10,826,000 in Other expense during the
fifty-two weeks ended April 1, 2010, which included previously capitalized deferred financing fees of $3,312,000, consent fee paid to holders of $7,142,000, and other expenses of
$372,000. On August 15, 2009, we redeemed the remaining $11,935,000 of Fixed Notes due 2012 at a price of $1,021.56 per $1,000 principal in accordance with the terms of the indenture. We
recorded a loss of $450,000 in Other expense related to the extinguishment of the remaining Fixed Notes due 2012 principal during the fifty-two weeks ended April 1, 2010, which
included previously capitalized deferred financing fees of $157,000, a consent fee paid to the holder of $257,000 and other expenses of $36,000.

We
acquired Grupo Cinemex, S.A. de C.V. ("Cinemex"), in January 2006 as part of a larger acquisition of Loews Cineplex Entertainment Corporation. We do not operate any other
theatres in Mexico and have divested of the majority of our other investments in international theatres in Japan, Hong Kong, Spain, Portugal, Argentina, Brazil, Chile, and Uruguay over the past
several years as part of our overall business strategy.

On
December 29, 2008, we sold all of our interests in Cinemex, which then operated 44 theatres with 493 screens primarily in the Mexico City Metropolitan Area, to Entretenimiento
GM de Mexico S.A. de C.V. ("Entretenimiento"). The purchase price received at the date of the sale and in accordance with the Stock Purchase Agreement was $248,141,000. During the year ended
April 1, 2010, we received payments of $4,315,000 for purchase price related to tax payments and refunds, and a working capital calculation and post closing adjustments. During the year ended
March 31, 2011, we received payments, net of legal fees, of $1,840,000 of the purchase price related to tax payments and refunds. Additionally, we estimate that we are contractually entitled to
receive an additional $7,251,000 of the purchase price related to tax payments and refunds. While we believe we are entitled to these amounts from Cinemex, the collection will require litigation which
was initiated by us on April 30, 2010. Resolution could take place over a prolonged period. In fiscal 2010, as a result of the litigation, we established an allowance for doubtful accounts
related to this receivable and further directly charged off certain amounts as uncollectible with an offsetting charge of $8,861,000 recorded to loss on disposal included as a component of
discontinued operations.

The
operations and cash flows of the Cinemex theatres have been eliminated from our ongoing operations as a result of the disposal transaction. We do not have any significant continuing
involvement in the operations of the Cinemex theatres. The results of operations of the Cinemex theatres have been classified as discontinued operations for all periods presented.

Our Consolidated Financial Statements are prepared in accordance with GAAP. In connection with the preparation of our financial
statements, we are required to make assumptions and estimates about future events, and apply judgments that affect the reported amounts of assets, liabilities, revenue, expenses and the related
disclosures. We base our assumptions, estimates, and judgments on historical experience, current trends and other factors that management believes to be relevant at the time our Consolidated Financial
Statements are prepared. On a regular basis, we review the accounting policies, assumptions, estimates, and judgments to ensure that our financial statements are presented fairly and in accordance
with GAAP. However, because future events and their effects cannot be determined with certainty, actual results could differ from our assumptions and estimates, and such differences could be material.

Our
significant accounting policies are discussed in Note 1 to our Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K for
further information. A listing of some of the more critical accounting estimates that we believe merit additional discussion and aid in better understanding and evaluating our reported financial
results are as follows.

Impairments. We evaluate goodwill and other indefinite lived intangible assets for impairment annually or more frequently as specific
events or
circumstances dictate. Impairment for other long lived assets (including finite lived intangibles) is done whenever events or changes in circumstances indicate that these assets may not be fully
recoverable. We have invested material amounts of capital in goodwill and other intangible assets in addition to other long lived assets. We operate in a very competitive business environment and our
revenues are highly dependent on movie content supplied by film producers. In addition, it is not uncommon for us to closely monitor certain locations where operating performance may not meet our
expectations. Because of these and other reasons, over the past three years we have recorded material impairment charges primarily related to long lived assets. For the last three years, impairment
charges were $21,604,000 in fiscal 2011, $3,765,000 in fiscal 2010, and $77,801,000 in fiscal 2009. There are a number of estimates and significant judgments that are made by management in performing
these impairment evaluations. Such judgments and estimates include estimates of future revenues, cash flows, capital expenditures, and the cost of capital, among others. We believe we have used
reasonable and appropriate business judgments. These estimates determine whether an
impairment has been incurred and also quantify the amount of any related impairment charge. Given the nature of our business and our recent history, future impairments are possible and they may be
material, based upon business conditions that are constantly changing. See Note 1The Company and Significant Accounting Policies included elsewhere in this Annual Report on Form
10-K for further information.

Our
recorded goodwill was $1,923,667,000 and $1,814,738,000 as of March 31, 2011 and April 1, 2010, respectively. We evaluate goodwill and our trademarks for impairment
annually during our fourth fiscal quarter and any time an event occurs or circumstances change that would more likely than not reduce the fair value for a reporting unit below its carrying amount. Our
goodwill is recorded in our Theatrical Exhibition operating segment, which is also the reporting unit for purposes of evaluating recorded goodwill for impairment. If the carrying value of the
reporting unit exceeds its fair value, we are required to reallocate the fair value of the reporting unit as if the reporting unit had been acquired in a business combination and the fair value of the
reporting unit was the price paid to acquire the reporting unit. We determine fair value by using an enterprise valuation methodology determined by applying multiples to cash flow estimates less net
indebtedness, which we believe is an appropriate method to determine fair value. There is considerable management judgment with respect to cash flow estimates and appropriate multiples and discount
rates to be used in determining fair value, and, accordingly, actual results could vary significantly from such estimates which fall under Level 3 within the fair value measurement hierarchy.

We
evaluated our enterprise value in fiscal 2011 and fiscal 2010 based on contemporaneous valuations reflecting market conditions. Two valuation approaches were utilized; the income
approach and the market approach. The income approach provides an estimate of enterprise value by measuring estimated annual cash flows over a discrete projection period and applying a present value
rate to the cash flows. The present value of the cash flows is then added to the present value equivalent of the residual value of the business to arrive at an estimated fair value of the business.
The residual value represents the present value of the projected cash flows beyond the discrete projection period. The discount rate is determined using a rate of return deemed appropriate for the
risk of achieving the projected cash flows. The market approach used publicly traded peer companies and reported transactions in the industry. Due to conditions and the relatively few sale
transactions, the market approach was used to provide additional support for the value achieved in the income approach.

Key
rates used in the income approach for fiscal 2011 and 2010 follow:

Description

Fiscal 2011

Fiscal 2010

Discount rate

9.0

%

9.0

%

Market risk premium

5.5

%

6.0

%

Hypothetical capital structure: Debt/Equity

40%/60

%

40%/60

%

The
discount rate is an estimate of the weighted average cost of debt and equity capital. The required return on common equity was estimated by adding the risk-free required
rate of return, the market risk premium (which is adjusted for the Company's estimated market volatility, or beta), and small stock premium.

The
results of our annual goodwill impairment analysis performed during the fourth quarter of fiscal 2011 indicated the estimated fair value of our Theatrical Exhibition reporting unit
exceeded its carrying value by approximately $500,000,000. While the fair value of our Theatrical Exhibition operations exceed the carrying value at the present time, small changes in certain
assumptions can have a significant impact on fair value. Facts and circumstances could change, including further deterioration of general economic conditions, the number of motion pictures released by
the studios, and the popularity of films supplied by our distributors. These and/or other factors could result in changes to the assumptions underlying the calculation of fair value which could result
in future impairment of our remaining goodwill.

The
aggregate annual cash flows were determined based on management projections on a theatre-by-theatre basis further adjusted by non-theatre cash
flows. The projections considered various factors including theatre lease terms, a reduction in attendance, and a reduction in capital investments in new theatres, given current market conditions and
the resulting difficulty with obtaining contracts for new-builds. Cash flow estimates included in the analysis reflect our best estimate of the impact of the roll-out of
digital projectors throughout our theatre circuit. Based on the seasonal nature of our business, fluctuations in attendance from period to period are expected and we do not believe that the results
would significantly decrease our projections or impact our conclusions regarding goodwill impairment. The anticipated acceleration of depreciation of the 35mm equipment described above under
"Significant Events" does not have an impact on our estimation of fair value as depreciation does not impact our projected available cash flow. The expected increases in rent expense upon full
deployment of the digital projection systems also described under "Significant Events" were included in the cash flow projections used to estimate our fair value as a part of our fiscal 2011 annual
goodwill impairment analysis, and had the impact of reducing the projected cash flows. Cash flows were projected through fiscal 2017 and assumed revenues would increase approximately 3.25% annually
primarily due to projected increases in ticket and concession pricing. Costs and expenses, as a percentage of revenue are projected to decrease from 85.5% to 85.1% through fiscal 2017. The residual
value is a function of the estimated cash flow for fiscal 2018 divided by a capitalization rate (discount rate less long-term growth rate of 2%), then discounted back to represent the
present value of the cash

flows
beyond the discrete projection period. We utilized the foregoing assumptions about future revenues and costs and expenses for the limited purpose of performing our annual goodwill impairment
analysis. These assumptions should not be viewed as "projections" or as representations by us as to expected future performance or results of operations. See "Cautionary Statements Concerning
Forward-Looking Statements" included elsewhere in this Annual Report on Form 10-K.

As
the expectations of the average investor are not directly observable, the market risk premium must be inferred. One approach is to use the long-run historical arithmetic
average premiums that investors have historically earned over and above the returns on long-term Treasury bonds. The premium obtained using the historical approach is sensitive to the time
period over which one calculates the average. Depending on the time period chosen, the historical approach yields an average premium in a range of 5.0% to 8.0%.

There
was no goodwill impairment in fiscal 2011 or fiscal 2010.

Film Exhibition Costs. We have agreements with film companies who provide the content we make available to our customers. We are
required to
routinely make estimates and judgments about box office receipts for certain films and for films provided by specific film distributors in closing our books each period. These estimates are subject to
adjustments based upon final settlements and determinations of final amounts due to our content providers that are typically based on a film's box
office receipts and how well it performs. In certain instances this evaluation is done on a film by film basis or in the aggregate by film production suppliers. We rely upon our industry experience
and professional judgment in determining amounts to fairly record these obligations at any given point in time. The accrual made for film costs have historically been material and we expect they will
continue to be so into the future. During fiscal years 2011, 2010 and 2009 our film exhibition costs totaled $887,758,000, $928,632,000, and $842,656,000, respectively.

Income and operating taxes. Income and operating taxes are inherently difficult to estimate and record. This is due to the complex
nature of the U.S.
tax code and also because our returns are routinely subject to examination by government tax authorities, including federal, state and local officials. Most of these examinations take place a few
years after we have filed our tax returns. Our tax audits in many instances raise questions regarding our tax filing positions, the timing and amount of deductions claimed and the allocation of income
among various tax jurisdictions. Our federal and state tax operating loss carried forward of approximately $454,450,000 and $839,666,000, respectively at March 31, 2011, require us to estimate
the amount of carry forward losses that we can reasonably be expected to realize using feasible and prudent tax planning strategies that are available to us. Future changes in conditions and in the
tax code may change these strategies and thus change the amount of carry forward losses that we expect to realize and the amount of valuation allowances we have recorded. Accordingly future reported
results could be materially impacted by changes in tax matters, positions, rules and estimates and these changes could be material.

Theatre and Other Closure Expense (Income). Theatre and other closure expense (income) is primarily related to payments made or received
or expected
to be made or received to or from landlords to terminate leases on certain of our closed theatres, other vacant space and theatres where development has been discontinued. Theatre and other closure
expense (income) is recognized at the time the theatre or auditorium closes, space becomes vacant or development is discontinued. Expected payments to or from landlords are based on actual or
discounted contractual amounts. We estimate theatre closure expense (income) based on contractual lease terms and our estimates of taxes and utilities. The discount rate we use to estimate theatre and
other closure expense (income) is based on estimates of our borrowing costs at the time of closing. Our theatre and other closure liabilities have been measured using a discount rate of approximately
7.55% to 9.0%. During the fourth quarter of our fiscal year ending March 31, 2011, we permanently closed 73 underperforming screens and auditoriums in six theatre locations while continuing to
operate the remaining 89 screens, and discontinued the

development
of and ceased use of certain vacant and under-utilized retail space at four other theatres. As a result of closing the screens and auditoriums and discontinuing the development and use of
the other spaces, we recorded a charge of $55,015,000 for theatre and other closure expense. We have recorded theatre and other closure (income) expense, which is included in operating expense in the
Consolidated Statements of Operations, of $60,763,000, $2,573,000, and $(2,262,000) during the fiscal years ended March 31, 2011, April 1, 2010, and April 2, 2009, respectively.

Gift card and packaged ticket revenues. As noted in our significant accounting policies for revenue we defer 100% of these items and
recognize these
amounts as they are redeemed by customers or when we estimate the likelihood of future redemption is remote based upon applicable laws and regulations. A vast majority of gift cards are used or
partially used. However a portion of the gift cards and packaged ticket sales we sell to our customers are not redeemed and not used in whole or in part. Non-redeemed or partially redeemed
cards or packaged tickets are known as "breakage" in our industry. We are required to estimate breakage and do so based upon our historical redemption patterns. Our history indicates that if a card or
packaged ticket is not used for 18 months or longer, its likelihood of being used past this 18 month period is remote. When it is determined that a future redemption is remote we record
income for unused cards and tickets. We changed our estimate on when packaged tickets would be considered remote in terms of future redemption in fiscal 2008 and changed our estimate of redemption
rates for packaged tickets in 2009. Prior to 2008, we had estimated that unused packaged tickets would not become remote in terms of future use until 24 months after they were issued. The
change we made to shorten this period from 24 to 18 months and align redemption patterns for packaged tickets with our gift card program represented our best judgment based on continued
development of specific historical redemption patterns in our gift cards at AMC. We believe this 18 month period continues to be appropriate and do not anticipate any changes to this policy
given our historical experience. We monitor redemptions and if we were to determine changes in our redemption statistics had taken place, we would be required to change the current 18 month
time period to a period that was determined to be more appropriate. This could cause us to either accelerate or lengthen the amount of time a gift card or packaged ticket is outstanding prior to being
remote in terms of any future redemption.

The following table sets forth our revenues, costs and expenses attributable to our operations. Reference is made to
Note 16Operating Segment to the Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K for additional information therein.

(In thousands except operating data)

52 Weeks
Ended
March 31, 2011

52 Weeks
Ended
April 1, 2010

52 Weeks
Ended
April 2, 2009

Revenues

Theatrical exhibition

Admissions

$

1,697,858

$

1,711,853

$

1,580,328

Concessions

664,108

646,716

626,251

Other theatre

61,002

59,170

58,908

Total revenues

$

2,422,968

$

2,417,739

$

2,265,487

Operating Costs and Expenses

Theatrical exhibition

Film exhibition costs

$

887,758

$

928,632

$

842,656

Concession costs

83,187

72,854

67,779

Operating expense

713,846

610,774

576,022

Rent

475,810

440,664

448,803

General and administrative expense:

Merger, acquisition and transaction costs

14,085

2,280

650

Management fee

5,000

5,000

5,000

Other

58,136

57,858

53,628

Depreciation and amortization

212,413

188,342

201,413

Impairment of long-lived assets

12,779

3,765

73,547

Operating costs and expenses

$

2,463,014

$

2,310,169

$

2,269,498

Operating Data (at period end):

New theatre screens

55

6

83

Screens acquired

960





Screen dispositions

400

105

77

Average screenscontinuing operations(1)

5,086

4,485

4,545

Number of screens operated

5,128

4,513

4,612

Number of theatres operated

360

297

307

Screens per theatre

14.2

15.2

15.0

Attendance (in thousands)continuing operations(1)

194,412

200,285

196,184

(1)

Includes
consolidated theatres only.

We
present Adjusted EBITDA as a supplemental measure of our performance. We define Adjusted EBITDA as earnings (loss) from continuing operations plus (i) income tax provisions
(benefit), (ii) interest expense and (iii) depreciation and amortization, as further adjusted to eliminate the impact of certain items that we do not consider indicative of our ongoing
operating performance. These further adjustments are itemized below. You are encouraged to evaluate these adjustments and the reasons we consider them appropriate for supplemental analysis. In
evaluating Adjusted EBITDA, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presentation. Our presentation of Adjusted
EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.

Amounts
represent preopening expense, theatre and other closure expense (income), deferred digital equipment rent expense and disposition of assets and
other gains included in operating expenses. During the fourth quarter of fiscal 2011, we permanently closed 73 underperforming screens and auditoriums in six theatre locations while continuing to
operate the remaining 89 screens, and discontinued the development of and ceased use of certain vacant and under-utilized retail space at four other theatres, resulting in a charge of
$55,015,000 for theatre and other closure expense, which significantly increased our annual theatre and other closure expense.

(2)

Other
expense for fiscal 2011 is comprised of the loss on extinguishment of indebtedness related to the redemption of our 11% Senior Subordinated Notes due
2016 of $24,332,000 and expense related to the modification of the Senior Secured Credit Facility of $3,656,000. Other expense for fiscal 2010 is comprised of the loss on extinguishment of
indebtedness related to the redemption of our 85/8% Senior Notes due 2012.

(3)

The
acquisition of Kerasotes contributed approximately $31,600,000 in Adjusted EBITDA during the period of May 24, 2010 to March 31, 2011.

Adjusted
EBITDA is a non-GAAP financial measure commonly used in our industry and should not be construed as an alternative to net earnings (loss) as an indicator of
operating performance or as an alternative to cash flow provided by operating activities as a measure of liquidity (as determined in accordance with GAAP). Adjusted EBITDA may not be comparable to
similarly titled measures reported by other companies. We have included Adjusted EBITDA because we believe it provides management and investors with additional information to measure our performance
and liquidity, estimate our value and evaluate our ability to service debt. In addition, we use Adjusted EBITDA for incentive compensation purposes.

Adjusted
EBITDA has important limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of our results as reported under
U.S. GAAP. For example, Adjusted EBITDA:

does not reflect changes in, or cash requirements for, our working capital needs;



does not reflect the significant interest expenses, or the cash requirements necessary to service interest or principal
payments, on our debt;



excludes tax payments that represent a reduction in cash available to us;



does not reflect any cash requirements for the assets being depreciated and amortized that may have to be replaced in the
future; and



does not reflect management fees that may be paid to our sponsors.

For the Year Ended March 31, 2011 and April 1, 2010

Revenues. Total revenues increased 0.2%, or $5,229,000, during the year ended March 31, 2011 compared to the year ended
April 1, 2010.
Total revenues included approximately $225,200,000 of additional revenues resulting from the acquisition of Kerasotes. Admissions revenues decreased 0.8%, or $13,995,000, during the year ended
March 31, 2011 compared to the year ended April 1, 2010, due to a 2.9% decrease in attendance, partially offset by a 2.1% increase in average ticket prices. Attendance was negatively
impacted by underperformance of film product during the year ended March 31, 2011 as compared to the year ended April 1, 2010. The increase in average ticket price was primarily due to
an increase in attendance from 3D film product for which we are able to charge more per ticket than for a standard 2D film, as well as increases in IMAX and 3D ticket prices. Admission revenues
included approximately $148,200,000 of additional revenues resulting from the acquisition of Kerasotes. Admissions revenues at comparable theatres (theatres opened on or before the first quarter of
fiscal 2010) decreased 8.2%, or $136,438,000, during the year ended March 31, 2011 from the comparable period last year. Concessions revenues increased 2.7%, or $17,392,000, during the year
ended March 31, 2011 compared to the year ended April 1, 2010, due to a 5.9% increase in average concessions per patron, partially offset by the decrease in attendance. The increase in
concessions per patron includes the impact of concession price and size increases placed in effect during the third quarter of fiscal 2010 and the second and third quarters of fiscal 2011, and a shift
in product mix to higher priced items. The increase in concession revenues includes approximately $73,300,000 from Kerasotes. Other theatre revenues increased 3.1%, or $1,832,000, during the year
ended March 31, 2011 compared to the year ended April 1, 2010, primarily due to increases in advertising revenues and theatre rentals, partially offset by a reduction in
on-line ticket fees. The increase in other theatre revenues includes $3,700,000 from Kerasotes.

Operating costs and expenses. Operating costs and expenses increased 6.6%, or $152,845,000 during the year ended March 31, 2011
compared to
the year ended April 1, 2010. The effect of the acquisition of Kerasotes was an increase in operating costs and expenses of approximately $237,500,000. Film exhibition costs decreased 4.4%, or
$40,874,000, during the year ended March 31, 2011 compared to the year ended April 1, 2010 due to the decrease in admissions revenues and the decrease in film exhibition costs as a
percentage of admissions revenues. As a percentage of admissions revenues, film exhibition costs were 52.3% in the current period and 54.2% in the prior year period, due to the underperformance of
film product during the current year. Concession costs increased 14.2%, or $10,333,000, during the year ended March 31, 2011 compared to the year ended April 1, 2010 due to an increase
in concession costs as a percentage of concessions revenues and the increase in concession revenues. As a percentage of concessions revenues, concession costs were 12.5% in the current period

compared
with 11.3% in the prior period, primarily due to the concession price and size increases, a shift in product mix to items that generate higher sales but lower percentage margins, and
concession offers targeting attendance growth. As a percentage of revenues, operating expense was 29.5% in the current period as compared to 25.3% in the prior period. During the year ended
March 31, 2011, we evaluated excess capacity and vacant and under-utilized retail space throughout our theatre circuit and recorded charges to theatre and other closure expense of $60,763,000,
which caused our operating expense to increase. See Note 14Theatre and Other Closure and Disposition of Assets included elsewhere in this Annual Report on
Form 10-K for further information. Gains were recorded on disposition of assets during the year ended March 31, 2011 which reduced operating expenses by approximately
$9,719,000, primarily due to the sale of a divested AMC theatre in conjunction with the acquisition of Kerasotes. Rent expense increased 8.0%, or $35,146,000, during the year ended March 31,
2011 compared to the year ended April 1, 2010, primarily due to increased rent as a result of the acquisition of Kerasotes of approximately $42,900,000.

General and Administrative Expense:

Merger, acquisition and transaction costs. Merger, acquisition and transaction costs increased $11,805,000 during the year ended
March 31,
2011 compared to the year ended April 1, 2010. Current year costs primarily consist of costs related to the acquisition of Kerasotes.

Management fees. Management fees were unchanged during the year ended March 31, 2011. Management fees of $1,250,000 are paid
quarterly, in
advance, to our Sponsors in exchange for consulting and other services.

Other. Other general and administrative expense increased 0.5%, or $278,000, during the year ended March 31, 2011 compared to the
year ended
April 1, 2010 primarily due to increases in salaries expense, advertising and public relations, and estimated expense related to our complete withdrawals from a union-sponsored pension plans of
$3,040,000, partially offset by decreases in incentive compensation expense related to declines in operating performance. During the year ended April 1, 2010, we recorded $1,400,000 of expense
related to a complete withdrawal from a union-sponsored pension plan.

Depreciation and amortization. Depreciation and amortization increased 12.8%, or $24,071,000, compared to the prior year. Increases in
depreciation
and amortization expense during the year ended March 31, 2011 are the result of increased net book value of theatre assets primarily due to the acquisition of Kerasotes, which contributed
$30,900,000 of depreciation expense, partially offset by decreases in the declining net book value of AMC theatre assets.

Impairment of long-lived assets. During the year ended March 31, 2011, we recognized non-cash impairment losses of
$12,779,000. We recognized an impairment loss of $11,445,000 on seven theatres with 75 screens (in Arizona, California, Maryland, Missouri and New York) in property, net. In addition, we recognized an
impairment loss related to a favorable lease of $1,334,000 recorded in intangible assets, net. During the year ended April 1, 2010, we recognized non-cash impairment losses of
$3,765,000 related to theatre fixed assets and real estate recorded in other long-term assets. We recognized an impairment loss of $2,330,000 on five theatres with 41 screens (in Florida,
California, New York, Utah and Maryland). Of the theatre charge, $2,330,000 was related to property, net. We also adjusted the carrying value of undeveloped real estate assets based on a recent
appraisal which resulted in an impairment charge of $1,435,000.

Other expense (income). Other expense (income) includes $14,131,000 and $13,591,000 of income related to the derecognition of gift card
liabilities,
as to which we believe future redemption to be remote, during the year ended March 31, 2011 and April 1, 2010, respectively. Other expense (income) includes a loss on extinguishment of
indebtedness related to the redemption of our 11% Senior

Subordinated
Notes due 2016 of $24,332,000 and expense related to the modification of our Senior Secured Credit Facility Term Loan due 2013 of $3,289,000, and Senior Secured Credit Facility Revolver
of $367,000 during the year ended March 31, 2011. Other expense (income) includes a loss of $11,276,000 related to the redemption of our 85/8% Senior Notes due 2012 during the
year ended April 1, 2010.

Interest expense. Interest expense increased 13.3%, or $17,610,000, primarily due to an increase in interest expense related to the
issuance of our
8.75% Senior Notes due 2019 (the "Notes due 2019") on June 9, 2009 and our 9.75% Senior Subordinated Notes due 2020 (the "Notes due 2020") on December 15, 2010 and modification of our
Senior Secured Credit Facility on December 15, 2010.

Equity in earnings of non-consolidated entities. Equity in earnings of non-consolidated entities was $17,178,000 in the
current year compared to $30,300,000 in the prior year. Equity in earnings related to our investment in National CineMedia, LLC were $32,851,000 and $34,436,000 for the year ended
March 31, 2011 and April 1, 2010, respectively. Equity in losses related to our investment in Digital Cinema Implementation Partners, LLC ("DCIP") were $5,231,000 and $4,155,000
for the year ended March 31, 2011 and April 1, 2010, respectively. We recognized an impairment loss of $8,825,000 related to an equity method investment through Midland Empire
Partners, LLC during the year ended March 31, 2011.

Gain on NCM transactions. The gain on NCM, Inc. shares of common stock sold during the year ended March 31, 2011 was
$64,648,000. We
also recorded a loss of $207,000 from the surrender of 1,479,638 ownership units in NCM as part of the 2010 Common Unit Adjustment. See Note 6Investments included elsewhere in this
Annual Report on Form 10-K for further information.

Investment income. Investment income was $391,000 for the year ended March 31, 2011 compared to $205,000 for the year ended
April 1,
2010.

Income tax provision (benefit). The income tax provision (benefit) from continuing operations was a provision of $1,950,000 for the
year ended
March 31, 2011 and a benefit of $68,800,000 for the year ended April 1, 2010. Our income tax benefit in fiscal 2010 includes the release of $71,765,000 of valuation allowance for
deferred tax assets. See Note 10Income Taxes to the Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K for our effective
income tax rate reconciliation.

Earnings (loss) from discontinued operations, Net. On December 29, 2008, we sold our operations in Mexico, including 44 theatres
and 493
screens. The results of operations of the Cinemex theatres have been classified as discontinued operations for all years presented and include bad debt expense related to amounts due from Cinemex of
$8,861,000 for the year ended April 1, 2010. See Note 3Discontinued Operations included elsewhere in this Annual Report on Form 10-K for the components of
the earnings from discontinued operations.

Net earnings (loss). Net earnings (loss) were $(122,853,000) and $69,790,000 for the year ended March 31, 2011 and April 1,
2010,
respectively. Net loss during the year ended March 31, 2011 was primarily due to theatre and other closure expense of $60,763,000, loss on extinguishment and modification of indebtedness of
$27,988,000, increased interest expense of $17,610,000, impairment charges of $21,604,000 in the current year, increased merger and acquisition costs of approximately $11,805,000 primarily due to the
acquisition of Kerasotes, and the decrease in attendance, partially offset by the gain on NCM transactions of $64,441,000 and a gain on disposition of assets of approximately $9,719,000. Net earnings
during the year ended April 1, 2010 were favorably impacted by a $71,765,000 reduction in the valuation allowance for deferred income tax assets, partially offset by an expense of $11,276,000
related to the redemption of our 85/8% Senior Notes due 2012 and losses of

$8,861,000
related to the allowance for doubtful accounts and direct write-offs of amounts due from Cinemex included in discontinued operations.

For the Year Ended April 1, 2010 and April 2, 2009

Revenues. Total revenues increased 6.7%, or $152,252,000, during the year ended April 1, 2010 compared to the year ended
April 2, 2009.
Admissions revenues increased 8.3%, or $131,525,000, during the year ended April 1, 2010 compared to the year ended April 2, 2009, due to a 6.1% increase in average ticket prices and a
2.1% increase in attendance. Admissions revenues at comparable theatres (theatres opened on or before the first quarter of fiscal 2009) increased 8.5%, or $131,470,000, during the year ended
April 1, 2010 from the comparable period last year. The increase in average ticket price was primarily due to increases in attendance from IMAX and 3D film product where we are able to charge
more per ticket than for a standard 2D film, as well as our practice of periodically reviewing ticket prices and making selective adjustments based upon such factors as general inflationary trends and
conditions in local markets. Attendance was positively impacted by more favorable 3D and IMAX film product during the year ended April 1, 2010 as compared to the year ended April 2,
2009, as well as by an increase in the number of IMAX and 3D enabled screens that we operate. Concessions revenues increased 3.3%, or $20,465,000, during the year ended April 1, 2010 compared
to the year ended April 2, 2009, due primarily to the increase in attendance. Other theatre revenues increased 0.4%, or $262,000, during the year ended April 1, 2010 compared to the year
ended April 2, 2009, primarily due to increases in on-line ticket fees, partially offset by a reduction in theatre rentals.

Operating costs and expenses. Operating costs and expenses increased 1.8%, or $40,671,000 during the year ended April 1, 2010
compared to the
year ended April 2, 2009. Film exhibition costs increased 10.2%, or $85,976,000, during the year ended April 1, 2010 compared to the year ended April 2, 2009 due to the increase
in admissions revenues and the increase in film exhibition costs as a percentage of admissions revenues. As a percentage of admissions revenues, film exhibition costs were 54.2% in the current period
and 53.3% in the prior year period primarily due to an increase in admissions revenues on higher grossing films, which typically carry a higher film cost as a percentage of admissions revenues.
Concession costs increased 7.5%, or $5,075,000, during the year ended April 1, 2010 compared to the year ended April 2, 2009 due to an increase in concession costs as a percentage of
concessions revenues and the increase in concession revenues. As a percentage of concessions revenues, concession costs were 11.3% in the current period compared with 10.8% in the prior period. As a
percentage of revenues, operating expense was 25.3% in the current period as compared to 25.4% in the prior period. Rent expense decreased 1.8%, or $8,139,000, during the year ended April 1,
2010 compared to the year ended April 2, 2009 primarily due to rent reductions from landlords related to their failure to meet co-tenancy provisions in certain lease agreements and
renegotiations on more favorable terms. Rent reductions related to co-tenancy may not continue should our landlords meet the related co-tenancy provisions in the future.

General and Administrative Expense:

Merger, acquisition and transaction costs. Merger, acquisition and transaction costs increased $1,630,000 during the year ended
April 1, 2010
compared to the year ended April 2, 2009 primarily due to costs incurred related to the Kerasotes acquisition during the current year.

Management fees. Management fees were unchanged during the year ended April 1, 2010. Management fees of $1,250,000 are paid
quarterly, in
advance, to our Sponsors in exchange for consulting and other services.

Other. Other general and administrative expense increased 7.9%, or $4,230,000, during the year ended April 1, 2010 compared to the
year ended
April 2, 2009 due primarily to increases in annual incentive compensation of approximately $12,000,000 based on improved operating performance and

increases
in net periodic pension expense of $4,654,000, partially offset by decreases in cash severance payments of $7,014,000 to our former Chief Executive Officer made in the prior year and a
decrease in expense related to a union-sponsored pension plan of $3,879,000. During the year ended April 2, 2009, we recorded $5,279,000 of expense related to our partial withdrawal liability
for a union-sponsored pension plan. During the year ended April 1, 2010, we recorded $1,400,000 of expense related to our estimated complete withdrawal from the union-sponsored pension plan.

Depreciation and amortization. Depreciation and amortization decreased 6.5%, or $13,071,000, compared to the prior year due primarily
to the
impairment of long-lived assets in fiscal 2009.

Impairment of long-lived assets. During the year ended April 1, 2010, we recognized non-cash impairment losses of
$3,765,000 related to theatre fixed assets and real estate recorded in other long-term assets. We recognized an impairment loss of $2,330,000 on five theatres with 41 screens (in Florida,
California, New York, Utah and Maryland). Of the theatre charge, $2,330,000 was related to property, net. We also adjusted the carrying value of undeveloped real estate assets based on a recent
appraisal which resulted in an impairment charge of $1,435,000. During the year ended April 2, 2009, we recognized non-cash impairment losses of $73,547,000 related to theatre fixed
assets, internal use software and assets held for sale. We recognized an impairment loss of $65,636,000 on 34 theatres with 520 screens (in Arizona, California, Canada, Florida, Georgia, Illinois,
Maryland, Massachusetts, Michigan, New York, North Carolina, Ohio, Texas, Virginia, Washington and Wisconsin). Of the theatre charge, $1,365,000 was related to intangible assets, net, and $64,271,000
was related to property, net. We recognized an impairment loss on abandonment of internal use software, recorded in other long-term assets of $7,125,000 when management determined that the
carrying value would not be realized through future use. We adjusted the carrying value of our assets held for sale to reflect the subsequent sales proceeds received in January 2009 and declines in
fair value, which resulted in impairment charges of $786,000.

Other expense (income). Other expense (income) includes $13,591,000 and $14,139,000 of income related to the derecognition of gift card
liabilities,
as to which we believe future redemption to be remote, during the year ended April 1, 2010 and April 2, 2009, respectively. Other (income) expense includes a loss on extinguishment of
indebtedness of $11,276,000 related to the Cash Tender Offer during the year ended April 1, 2010.

Interest expense. Interest expense increased 8.5%, or $10,363,000, primarily due to an increase in interest expense related to the
issuance of the
Notes due 2019, partially offset by a decrease in interest rates on the senior secured credit facility and extinguishment of debt from the Cash Tender Offer.

Equity in earnings of non-consolidated entities. Equity in earnings of non-consolidated entities was $30,300,000 in the
current year compared to $24,823,000 in the prior year. Equity in earnings related to our investment in National CineMedia, LLC were $34,436,000 and $27,654,000 for the year ended
April 1, 2010 and April 2, 2009, respectively. We recognized an impairment loss of $2,742,000 related to an equity method investment in one U.S. motion picture theatre during the year
ended April 2, 2009.

Investment income. Investment income was $205,000 for the year ended April 1, 2010 compared to $1,696,000 for the year ended
April 2,
2009. The year ended April 2, 2009 includes a gain of $2,383,000 from the May 2008 sale of our investment in Fandango, which was the result of receiving the final distribution from the general
claims escrow account. During the year ended April 2, 2009, we recognized
an impairment loss of $1,512,000 related to unrealized losses previously recorded in accumulated other comprehensive income on marketable securities related to one of our deferred compensation plans
when we determined the decline in fair value below historical cost to be other than temporary.

Income tax provision (benefit). The income tax provision (benefit) from continuing operations was a benefit of $68,800,000 for the year
ended
April 1, 2010 and a provision of $5,800,000 for the year ended April 2, 2009. Our income tax benefit in fiscal 2010 includes the release of $71,765,000 of valuation allowance for
deferred tax assets. See Note 10Income Taxes to the Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K for our effective
income tax rate reconciliation.

Earnings (loss) from discontinued operations, net. On December 29, 2008, we sold our operations in Mexico, including 44 theatres
and 493
screens. The results of operations of the Cinemex theatres have been classified as discontinued operations for all years presented and includes bad debt expense related to amounts due from Cinemex of
$8,861,000 for the year ended April 1, 2010. See Note 3Discontinued Operations for the components of the earnings from discontinued operations.

Net earnings (loss). Net earnings (loss) were $69,790,000 and $(81,172,000) for the year ended April 1, 2010 and April 2, 2009,
respectively. Net earnings were favorably impacted by a $71,765,000 reduction in
the valuation allowance for deferred income tax assets. Net earnings during the year ended April 1, 2010 were negatively impacted by an expense of $11,276,000 related to the Cash Tender Offer
and by losses of $8,861,000 related to the allowance for doubtful accounts and direct write-offs of amounts due from Cinemex included in discontinued operations. Net loss for the year
ended April 2, 2009 was primarily due to impairment charges of $77,801,000.

Liquidity and Capital Resources

Our consolidated revenues are primarily collected in cash, principally through box office admissions and theatre concessions sales. We
have an operating "float" which partially finances our operations and which generally permits us to maintain a smaller amount of working capital capacity. This float exists because admissions revenues
are received in cash, while exhibition costs (primarily film rentals) are ordinarily paid to distributors from 20 to 45 days following receipt of box office admissions revenues. Film
distributors generally release the films which they anticipate will be the most successful during the summer and holiday seasons. Consequently, we typically generate higher revenues during such
periods.

We
have the ability to borrow against our senior secured credit facility to meet obligations as they come due (subject to limitations on the incurrence of indebtedness in our various
debt instruments) and had approximately $180,226,000 under our Senior Secured Revolving Credit Facility available to meet these obligations as of March 31, 2011. Reference is made to
Note 8Corporate Borrowings and Capital and Financing Lease Obligations to the Consolidated Financial Statements included elsewhere in this Annual Report on
Form 10-K for information about our outstanding indebtedness and outstanding indebtedness of Parent.

We
believe that cash generated from operations and existing cash and equivalents will be sufficient to fund operations and planned capital expenditures and acquisitions currently and for
at least the next 12 months and enable us to maintain compliance with covenants related to the Senior Secured Credit Facility and our 8% Senior Subordinated Notes due 2014 (the "Notes due
2014"), Notes due 2019, and Notes due 2020. We are considering various options with respect to the utilization of cash and equivalents on hand in excess of our anticipated operating needs. Such
options might include, but are not limited to, acquisitions of theatres or theatre companies, repayment of corporate borrowings of AMCE and Parent and payment of dividends.

Cash flows provided by operating activities, as reflected in the Consolidated Statements of Cash Flows, were $92,072,000, $258,015,000
and $200,701,000 during the years ended March 31, 2011, April 1, 2010 and April 2, 2009, respectively. The decrease in operating cash flows provided by operating activities during
the year ended March 31, 2011 was primarily due to the decrease in net earnings and attendance and also lower amounts of accounts payables and accrued expenses and other liabilities associated
with lower levels of business volume and including payments of amounts acquired in the Kerasotes acquisition as well as payments made for merger, acquisition and transaction costs in connection with
the Kerasotes acquisition. The increase in operating cash flows during the year ended April 1, 2010 is primarily due to an increase in accrued expenses and other liabilities as a result of
increases in accrued interest and annual incentive compensation and the increase in attendance. We had working capital surplus (deficit) as of March 31, 2011 and April 1, 2010 of
$(39,596,000) and $143,172,000, respectively. Working capital includes $141,237,000 and $125,842,000 of deferred revenue as of March 31, 2011 and April 1, 2010, respectively.

Cash Flows from Investing Activities

Cash provided by (used in) investing activities, as reflected in the Consolidated Statement of Cash Flows, were $(250,037,000),
$(96,337,000) and $100,925,000 during the years ended March 31, 2011, April 1, 2010 and April 2, 2009, respectively. Cash outflows from investing activities include capital
expenditures during the years ended March 31, 2011, April 1, 2010, and April 2, 2009 of $129,347,000, $97,011,000 and $121,456,000, respectively. Our capital expenditures
primarily consisted of maintaining our theatre circuit, technology upgrades, strategic initiatives and remodels. We expect that our gross capital expenditures in fiscal 2012 will be approximately
$140,000,000 to $150,000,000.

During
the year ended March 31, 2011, we paid $280,606,000 for the purchase of Kerasotes theatres at closing, net of cash acquired. The purchase included working capital and other
purchase price adjustments as described in the Unit Purchase Agreement.

During
the year ended March 31, 2011, we received net proceeds of $102,224,000 from the sale of 6,655,193 shares of common stock of NCM, Inc. for $16.00 per share and
reduced our related investment in NCM by $37,576,000, the average carrying amount of the shares owned.

We
received $57,400,000 in cash proceeds from the sale of certain theatres required to be divested in connection with the Kerasotes acquisition during the year ended March 31,
2011 and received $991,000 for the sale of real estate acquired from Kerasotes.

On
March 26, 2010, we acquired 117 digital projection systems from third party lessors for $6,784,000 and sold these systems together with seven digital projectors that we owned
to DCIP for cash proceeds of $6,570,000 on the same day.

Cash
flows for the year ended April 2, 2009 include proceeds from the sale of Cinemex of $224,378,000 and proceeds from the sale of Fandango of $2,383,000. We have received an
additional $1,840,000 and $4,315,000 of purchase price from Cinemex related to tax payments and refunds and a working capital calculation and post closing adjustments during the years ended
March 31, 2011 and April 1, 2010, respectively.

We
fund the costs of constructing, maintaining and remodeling new theatres through existing cash balances, cash generated from operations or borrowed funds, as necessary. We generally
lease our theatres pursuant to long-term non-cancelable operating leases which may require the developer, who owns the property, to reimburse us for the construction costs. We
may decide to own the real estate assets of new theatres and, following construction, sell and leaseback the real estate assets pursuant to long-term non-cancelable operating
leases.

Cash flows provided by (used in) financing activities, as reflected in the Consolidated Statement of Cash Flows, were $(35,122,000),
$(199,132,000), and $129,203,000 during the years ended March 31, 2011, April 1, 2010, and April 2, 2009, respectively.

Proceeds
from the issuance of the 9.75% Senior Subordinated Notes due 2020 were $600,000,000 and deferred financing costs paid related to the issuance of the 9.75% Senior Notes due 2020
were $12,699,000 during the year ended March 31, 2011. In addition, deferred financing costs paid related to the Senior Secured Credit Facility were $1,943,000. During the year ended
April 1, 2010, we issued $600,000,000 aggregate principal amount of 8.75% Senior Notes due 2019 ("Notes due 2019"). Proceeds from the issuance of the Notes due 2019 were $585,492,000 and
deferred financing costs paid related to the issuance of the 8.75% Senior Notes due 2019 were $16,259,000.

During
the year ended March 31, 2011, we made principal payments of $325,000,000 to repurchase our 11% Senior Subordinated Notes due 2016. In addition, we made payments for tender
offer and consent consideration of $18,446,000 for our Notes due 2016.

During
fiscal 2011, we used cash on hand to pay four dividend distributions to Holdings in an aggregate amount of $278,258,000. Holdings and Parent used the available funds to make cash
payments to extinguish the 12% Senior Discount Notes due 2014 and the related cash interest payments and to pay corporate overhead expenses incurred in the ordinary course of business and to pay a
dividend to Parent. During fiscal 2010, we used cash on hand to pay two dividend distributions to Holdings in an aggregate amount of $329,981,000. Holdings and Parent used the available funds to make
cash interest payments on its 12% Senior Discount Notes due 2014, to pay corporate overhead expenses incurred in the ordinary course of business and to pay a dividend to Parent. Parent made payments
to purchase term loans and reduced the principal balance of its Parent Term Loan Facility from $466,936,000 to $193,290,000 with a portion of the dividend proceeds. During fiscal 2009, we paid two
cash dividends totaling $35,989,000 to Holdings and borrowed $185,000,000 under our senior secured credit facility.

During
the fiscal year ended April 1, 2010, we made principal payments of $250,000,000 in connection with a cash tender offer and redemption of all of our then outstanding
85/8% Senior Notes due 2012, and we repaid $185,000,000 of revolving credit borrowings under our senior secured credit facility.

Minimum annual cash payments required under existing capital and financing lease obligations, maturities of corporate borrowings,
future minimum rental payments under existing operating leases, furniture, fixtures, and equipment and leasehold purchase provisions, ADA related betterments and pension funding that have initial or
remaining non-cancelable terms in excess of one year as of March 31, 2011 are as follows:

(In thousands)

Minimum
Capital and
Financing
Lease
Payments

Principal
Amount of
Corporate
Borrowings(1)

Interest
Payments on
Corporate
Borrowings(2)

Minimum
Operating
Lease
Payments

Capital
Related
Betterments(3)

Pension
Funding(4)

Total
Commitments

2012

$

9,424

$

6,500

$

153,975

$

422,605

$

56,426

$

9,199

$

658,129

2013

8,456

145,287

153,366

426,255

7,580



740,944

2014

8,107

305,004

149,160

407,275

1,000



870,546

2015

8,129

5,004

126,985

402,757

1,000



543,875

2016

8,235

5,004

126,810

390,583

1,000



531,632

Thereafter

72,699

1,649,076

454,717

2,240,031





4,416,523

Total

$

115,050

$

2,115,875

$

1,165,013

$

4,289,506

$

67,006

$

9,199

$

7,761,649

(1)

Represents
cash requirements for the payment of principal on corporate borrowings. Total amount does not equal carrying amount due to unamortized discounts
on issuance.

(2)

Interest
expense on the term loan portion of our senior secured credit facility was estimated at 1.75% for the Term Loan due 2013 and 3.50% for the Term
Loan due 2016 based upon the interest rate in effect as of March 31, 2011.

(3)

Includes
committed capital expenditures, investments, and betterments to our circuit including the estimated cost of ADA related betterments. Does not
include planned, but non-committed capital expenditures.

(4)

We
fund our pension plan such that the plan is in compliance with Employee Retirement Income Security Act ("ERISA") and the plan is not considered "at risk"
as defined by ERISA guidelines. The plan has been frozen effective December 31, 2006. Also included are payments due under a withdrawal liability for a union sponsored plan. The retiree health
plan is not funded.

As
discussed in Note 10Income Taxes to the Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K, we adopted
accounting for uncertainty in income taxes per the guidance in ASC 740, Income Taxes, ("ASC 740"). At March 31, 2011, our company has recognized
an obligation for unrecognized benefits of $28,200,000. There are currently unrecognized tax benefits which we anticipate will be resolved in the next 12 months; however, we are unable at this
time to estimate what the impact on our effective tax rate will be. Any amounts related to these items are not included in the table above.

Fee Agreement

In connection with the holdco merger, on June 11, 2007, Parent, Holdings, AMCE and the Sponsors entered into a Fee Agreement
(the "Management Fee Agreement"), which replaced the December 23, 2004 fee agreement among Holdings, AMCE and the Sponsors, as amended and restated on January 26, 2006 (the "original fee
agreement"). The Management Fee Agreement provides for an annual management fee of $5,000,000, payable quarterly and in advance to our Sponsors, on a pro rata basis, until the earlier of
(i) the twelfth anniversary from December 23, 2004, (ii) such time as the Sponsors own less than 20% in the aggregate of Parent. In addition, the Management Fee Agreement

provides
for reimbursements by AMCE to the Sponsors for their out-of-pocket expenses, and by AMCE to Parent of up to $3,500,000 for fees payable by Parent in any single fiscal
year in order to maintain Parents' and AMCE's corporate existence, corporate overhead expenses and salaries or other compensation of certain employees.

Upon
the consummation of a change in control transaction or an IPO, the Sponsors will receive, in lieu of quarterly payments of the annual management fee, an automatic fee equal to the
net present value of the aggregate annual management fee that would have been payable to the Sponsors during the remainder of the term of the fee agreement (assuming a twelve year term from the date
of the original fee agreement), calculated using the treasury rate having a final maturity date that is closest to the twelfth anniversary of the date of the original fee agreement date. As of
March 31, 2011, we estimate this amount would be $25,835,000 should a change in control transaction or an IPO occur.

The
Management Fee Agreement also provides that AMCE will indemnify the Sponsors against all losses, claims, damages and liabilities arising in connection with the management services
provided by the Sponsors under the fee agreement.

Investment in NCM LLC

We hold an investment of 15.66% in NCM LLC accounted for following the equity method as of March 31, 2011. The fair
market value of these units is approximately $323,435,000 as of March 31, 2011, based upon the closing price of NCM, Inc. common stock. We have little tax basis in these units;
therefore, the sale of all these units would require us to report taxable income of approximately $472,305,000, including distributions received from NCM LLC that were
previously deferred. Our investment in NCM LLC is a source of liquidity for us and we expect that any sales we may make of NCM LLC units would be made in such a manner to most
efficiently manage any related tax liability. We have available net operating loss carryforwards which could reduce any related tax liability.

Impact of Inflation

Historically, the principal impact of inflation and changing prices upon us has been to increase the costs of the construction of new
theatres, the purchase of theatre equipment, rent and the utility and labor costs incurred in connection with continuing theatre operations. Film exhibition costs, our largest cost of operations, are
customarily paid as a percentage of admissions revenues and hence, while the film exhibition costs may increase on an absolute basis, the percentage of admissions revenues represented by such expense
is not directly affected by inflation. Except as set forth above, inflation and changing prices have not had a significant impact on our total revenues and results of operations.

Off-Balance Sheet Arrangements

Other than the operating leases detailed above in this Form 10-K, under the heading "Commitments and Contingencies," we have no other
off-balance sheet arrangements.

New Accounting Pronouncements

See Note 1The Company and Significant Accounting Policies to the Consolidated Financial Statements included
elsewhere in this Annual Report on Form 10-K for information regarding recently issued accounting standards.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

We are exposed to various market risks including interest rate risk and foreign currency exchange rate risk.

Market risk on variable-rate financial instruments. We maintain a Senior Secured Credit Facility comprised of a $192,500,000 revolving
credit facility and a $650,000,000 term loan facility, which permits borrowings at a rate equal to an applicable margin plus, at our option, either a base rate or LIBOR. Increases in market interest
rates would cause interest expense to increase and earnings before income taxes to decrease. The change in interest expense and earnings before income taxes would be dependent upon the weighted
average outstanding borrowings during the reporting period following an increase in market interest rates. We had no borrowings on our revolving credit facility as of March 31, 2011 and had
$615,875,000 outstanding under the term loan facility on March 31, 2011. A 100 basis point change in market interest rates would have increased or decreased interest expense on the senior
secured credit facility by $6,268,000 during the fifty-two weeks ended March 31, 2011.

Market risk on fixed-rate financial instruments. Included in long-term corporate borrowings are principal amounts of
$300,000,000 of our Notes due 2014, $600,000,000 of our Notes due 2019, and $600,000,000 of our Notes due 2020. Increases in market interest rates would generally cause a decrease in the fair value of
the Notes due 2014, Notes due 2019, and Notes due 2020 and a decrease in market interest rates would generally cause an increase in fair value of the Notes due 2014, Notes due 2019, and Notes due
2020.

Foreign currency exchange rates. We currently operate theatres in Canada, France and the United Kingdom. As a result of these
operations, we have
assets, liabilities, revenues and expenses denominated in foreign currencies. The strengthening of the U.S. dollar against the respective currencies causes a decrease in the carrying values of assets,
liabilities, revenues and expenses denominated in such foreign currencies and the weakening of the U.S. dollar against the respective currencies causes an increase in the carrying values of these
items. The increases and decreases in
assets, liabilities, revenues and expenses are included in accumulated other comprehensive loss. Changes in foreign currency exchange rates also impact the comparability of earnings in these countries
on a year-to-year basis. As the U.S. dollar strengthens, comparative translated earnings decrease, and as the U.S. dollar weakens comparative translated earnings from foreign
operations increase. A 10% increase in the value of the U.S. dollar against all foreign currencies of countries where we currently operate theatres would increase earnings before income taxes by
approximately $2,634,000 for the fifty-two weeks ended March 31, 2011 and decrease accumulated other comprehensive loss by approximately $10,390,000 as of March 31, 2011. A
10% decrease in the value of the U.S. dollar against all foreign currencies of countries where we currently operate theatres would increase earnings before income taxes by approximately $4,083,000 for
the fifty-two weeks ended March 31, 2011 and increase accumulated other comprehensive loss by approximately $12,699,000 as of March 31, 2011.

MANAGEMENT'S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

AMC Entertainment Inc.

TO THE STOCKHOLDER OF AMC ENTERTAINMENT INC.

Management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company as
defined in Rule 12a-15(f) of the Exchange Act. With our participation, an evaluation of the effectiveness of internal control over financial reporting was conducted as of
March 31, 2011, based on the framework and criteria established in Internal ControlIntegrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission. Based on this evaluation, our management has concluded that our internal control over financial reporting was effective as of March 31,
2011.

We
have audited the accompanying consolidated balance sheets of AMC Entertainment Inc. (and subsidiaries) as of March 31, 2011 and April 1, 2010, and the related
consolidated statements of operations, stockholder's equity, and cash flows for the 52-week periods then ended. These consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We
conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our opinions.

In
our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of AMC Entertainment Inc. (and
subsidiaries) as of March 31, 2011 and April 1, 2010, and the results of their operations and their cash flows for the 52-week periods then ended, in conformity with U.S. generally
accepted accounting principles.

As
discussed in Note 1 to the consolidated financial statements, the Company changed its accounting treatment for business combinations due to the adoption of new accounting
requirements issued by the FASB, as of April 3, 2009.

In
our opinion, the accompanying consolidated statements of operations, of stockholder's equity and of cash flows present fairly, in all material respects, the results of operations and
cash flows of AMC Entertainment, Inc. and its subsidiaries (the "Company") for the 52 week period ended April 2, 2009 in conformity with accounting principles generally accepted
in the United States of America. These
financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these
statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit provides a reasonable
basis for our opinion.

AMC Entertainment Inc. ("AMCE" or the "Company") is an intermediate holding company, which, through its direct and indirect subsidiaries, including American
Multi-Cinema, Inc. ("AMC") and its subsidiaries, and AMC Entertainment International, Inc. ("AMCEI") and its subsidiaries (collectively with AMCE, unless the context otherwise requires,
the "Company"), is principally involved in the theatrical exhibition business and owns, operates or has interests in theatres located in the United States, Canada, China (Hong Kong), France and the
United Kingdom. The Company discontinued its operations in Mexico during the third quarter of fiscal 2009. The Company's theatrical exhibition business is conducted through AMC and its subsidiaries
and AMCEI.

On
March 31, 2011, Marquee Holdings Inc. ("Holdings"), a direct, wholly-owned subsidiary of Parent and a holding company, the sole asset of which consisted of the capital
stock of AMCE, was merged with and into Parent, with Parent continuing as the surviving entity. As a result of the merger, AMCE became a direct subsidiary of Parent.

Use of Estimates: The preparation of financial statements in conformity with generally accepted accounting principles requires
management to make
estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Significant estimates and assumptions are used for, but not limited to: (1) Impairments, (2) Film exhibition costs,
(3) Income and operating taxes, (4) Theatre and Other Closure Expense (Income), and (5) Gift card and packaged ticket revenues. Actual results could differ from those estimates.

Principles of Consolidation: The consolidated financial statements include the accounts of AMCE and all subsidiaries, as
discussed above. All
significant intercompany balances and transactions have been eliminated in consolidation. There are no noncontrolling (minority) interests in the Company's consolidated subsidiaries; consequently, all
of its stockholder's equity, net earnings (loss) and comprehensive earnings (loss) for the periods presented are attributable to controlling interests.

Fiscal Year: The Company has a 52/53 week fiscal year ending on the Thursday closest to the last day of March. Fiscal 2011,
fiscal 2010, and fiscal
2009 reflect 52 week periods.

Revenues: Revenues are recognized when admissions and concessions sales are received at the theatres. The Company defers 100% of
the revenue
associated with the sales of gift cards and packaged tickets until such time as the items are redeemed or management believes future redemption to be remote based upon applicable laws and regulations.
During fiscal 2009, management changed its estimate of redemption rates for packaged tickets. Management believes the 18 month estimate and revised redemption rates are supported by its
continued development of specific historical redemption patterns for gift cards and that they are reflective of management's current best estimate. These changes in estimate had the effect of
increasing other theatre revenues and earnings from continuing operations by approximately $2,600,000 and $1,600,000, respectively, during fiscal 2009. During the

fiscal
years ended March 31, 2011, April 1, 2010, and April 2, 2009, the Company recognized $14,131,000, $13,591,000, and $14,139,000 of income, respectively, related to the
derecognition of gift card liabilities where management believes future redemption to be remote which was recorded in other expense (income) in the Consolidated Statements of Operations.

Film Exhibition Costs: Film exhibition costs are accrued based on the applicable box office receipts and estimates of the final
settlement to the
film licenses. Film exhibition costs include certain advertising costs. As of March 31, 2011 and April 1, 2010, the Company recorded film payables of $62,598,000 and $78,499,000,
respectively, which is included in accounts payable in the accompanying Consolidated Balance Sheets.

Concession Costs: The Company records payments from vendors as a reduction of concession costs when earned unless it is
determined that the payment
was for the fair value of services provided to the vendor where the benefit to the vendor is sufficiently separable from the Company's purchase of the vendor's products. In the latter instance,
revenue is recorded when and if the consideration received is in excess of fair value, which excess is recorded as a reduction of concession costs. In addition, if the payment from the vendor is for a
reimbursement of expenses, then those expenses are offset.

Screen Advertising: On March 29, 2005, the Company and Regal Entertainment Group combined their respective cinema screen
advertising
businesses into a new joint venture company called National CineMedia, LLC ("NCM") and on July 15, 2005, Cinemark Holdings, Inc. ("Cinemark") joined NCM, as one of the founding
members. NCM engages in the marketing and sale of cinema advertising and promotions products; business communications and training services; and the distribution of digital alternative content. The
Company records its share of on-screen advertising revenues generated by NCM in other theatre revenues.

Guest Frequency Program: The Company has a guest frequency program, AMC Stubs,
which allows members
to earn $10 for each $100 purchase completed at its theatres. Amounts earned are redeemable by members on future purchases at the Company's theatres. The value of amounts earned are included in
deferred revenues and income and recorded as a reduction in admissions and concessions revenues at the time the amounts are earned, based on the selling price of awards that are projected to be
redeemed. Earned awards must be redeemed no later than 90 days from the date of issuance. The Company accounts for membership fee revenue for its guest frequency program on a deferred basis,
net of estimated refunds, whereby revenue is recognized ratably over the one-year membership period.

Advertising Costs: The Company expenses advertising costs as incurred and does not have any direct-response advertising recorded
as assets.
Advertising costs were $6,723,000, $9,103,000 and $18,121,000 for the periods ended March 31, 2011, April 1, 2010 and April 2, 2009, respectively, and are recorded in operating
expense in the accompanying Consolidated Statements of Operations.

Cash and Equivalents: Under the Company's cash management system, checks issued but not presented to banks frequently result in
book overdraft
balances for accounting purposes and are classified within accounts payable in the balance sheet. The change in book overdrafts are reported as a component of operating cash flows for accounts payable
as they do not represent bank overdrafts. The

amount
of these checks included in accounts payable as of March 31, 2011 and April 1, 2010 was $54,619,000 and $60,943,000, respectively. All highly liquid debt instruments and
investments purchased with an original maturity of three months or less are classified as cash equivalents.

Intangible Assets: Intangible assets are recorded at cost or fair value, in the case of intangible assets resulting from
acquisitions, and are
comprised of lease rights, amounts assigned to theatre leases acquired under favorable terms, customer relationship intangible assets, management contracts, trademarks and trade names each of which
are being amortized on a straight-line basis over the estimated remaining useful lives of the assets except for a customer relationship intangible asset, the AMC trademark and the
Kerasotes trade names. The customer relationship intangible asset is amortized over eight years based upon the pattern in which the economic benefits of the intangible asset are expected to be
consumed or otherwise used up. This pattern indicates that over 2/3rds of the cash flow generated from the asset is derived during the first five years. The AMC trademark and Kerasotes trade names are
considered indefinite lived intangible assets, and therefore are not amortized
but rather evaluated for impairment annually. In fiscal 2011, 2010 and 2009, the Company impaired favorable lease intangible assets in the amount of $1,334,000, $0 and $1,364,000, respectively.

Investments: The Company accounts for its investments in non-consolidated entities using either the cost or equity methods of
accounting
as appropriate, and has recorded the investments within other long-term assets in its Consolidated Balance Sheets and records equity in earnings and losses of those entities accounted for
following the equity method of accounting within equity in earnings of non-consolidated entities in its Consolidated Statements of Operations. The Company follows the guidance in ASC
323-30-35-3, which prescribes the use of the equity method for investments where the Company has significant influence. The Company classifies gains and losses on
sales of and changes of interest in equity method investments within equity in earnings of non-consolidated entities or in separate line items on the face of the Consolidated Statements of
Operations when material, and classifies gains and losses on sales of investments accounted for using the cost method in investment income. Gains and losses on cash sales are recorded using the
weighted average cost of all interests in the investments. Gains and losses related to non-cash negative common unit adjustments are recorded using the weighted average cost of those units accounted
for as Tranche 2 Investments in NCM which were received in connection with prior common unit adjustments. See Note 6Investments for further discussion of our investments in
NCM. As of March 31, 2011, the Company holds equity method investments comprised of a 15.66% interest in NCM, a joint venture that markets and sells cinema advertising and promotions; a 26.22%
interest in Movietickets.com, a joint venture that provides moviegoers with a way to buy movie tickets online, access local showtime information, view trailers and read reviews; a 29% interest in
Digital Cinema Implementation Partners LLC, a joint venture charged with implementing digital cinema in the Company's theatres; a 50% ownership interest in two U.S. motion picture theatres and
one IMAX screen; and a 50% interest in Midland Empire Partners, LLC, a joint venture developing live and film entertainment venues in the Power & Light District of Kansas City, Missouri.
During fiscal 2011, the Company formed a motion picture distribution company, Open Road Films and holds a 50% ownership interest. At March 31, 2011, the Company's recorded investments are less
than its proportional ownership of the underlying equity in these entities by approximately $8,307,000, excluding NCM. Included in equity in earnings of non-consolidated entities for the
52 weeks ended March 31, 2011 is an impairment charge of $8,825,000 related to a joint

venture
investment in Midland Empire Partners, LLC. The decline in the fair market value of the investment was considered other than temporary due to inadequate projected future cash flows.
Included in equity in earnings of non-consolidated entities for the 52 weeks ended April 2, 2009 is an impairment charge of $2,742,000 related to a theatre joint venture
investment. The decline in the fair market value of the investment was considered other than temporary due to competitive theatre builds.

The
Company's investment in RealD Inc. is an available-for-sale marketable equity security and is carried at fair value (Level 1). Unrealized gains
and losses on available-for-sale securities are included in the Company's Consolidated
Balance Sheets as a component of accumulated other comprehensive loss. See Note 6Investments for further discussion of our investment in RealD Inc.

Goodwill: Goodwill represents the excess of cost over fair value of net tangible and identifiable intangible assets related to
acquisitions. The
Company is not required to amortize goodwill as a charge to earnings; however, the Company is required to conduct an annual review of goodwill for impairment.

The
Company's recorded goodwill was $1,923,667,000 and $1,814,738,000 as of March 31, 2011 and April 1, 2010, respectively. The Company evaluates goodwill and its
trademarks for impairment annually as of the beginning of the fourth fiscal quarter or more frequently as specific events or circumstances dictate. The Company's goodwill is recorded in its Theatrical
Exhibition operating segment which is also the reporting unit for purposes of evaluating recorded goodwill for impairment. If the carrying value of the reporting unit exceeds its fair value the
Company is required to reallocate the fair value of the reporting unit as if the reporting unit had been acquired in a business combination and the fair value of the reporting unit was the price paid
to acquire the reporting unit. The Company determines fair value by using an enterprise valuation methodology determined by applying multiples to cash flow estimates less net indebtedness, which the
Company believes is an appropriate method to determine fair value. There is considerable management judgment with respect to cash flow estimates and appropriate multiples and discount rates to be used
in determining fair value and such management estimates fall under Level 3 within the fair value measurement hierarchy, see Note 15Fair Value Measurements.

The
Company performed its annual impairment analysis during the fourth quarter of fiscal 2011. The fair value of the Company's Theatrical Exhibition operations exceed the carrying value
by more than 10% and management does not believe that impairment is probable.

Other Long-term Assets: Other long-term assets are comprised principally of investments in partnerships and joint ventures,
costs incurred in connection with the issuance of debt securities, which are being amortized to interest expense over the respective lives of the issuances, and capitalized computer software, which is
amortized over the estimated useful life of the software.

Leases: The majority of the Company's operations are conducted in premises occupied under lease agreements with initial base
terms ranging generally
from 15 to 20 years, with certain leases containing options to extend the leases for up to an additional 20 years. The Company does not believe that exercise of the renewal options are
reasonably assured at the inception of the lease agreements and, therefore, considers the initial base term as the lease term. Lease terms vary but generally the leases provide for fixed and
escalating rentals, contingent escalating rentals based on the Consumer

Price
Index not to exceed certain specified amounts and contingent rentals based on revenues with a guaranteed minimum.

The
Company records rent expense for its operating leases on a straight-line basis over the base term of the lease agreements commencing with the date the Company has
"control and access" to the leased premises, which is generally a date prior to the "lease commencement date" in the lease agreement. Rent expense related to any "rent holiday" is recorded as
operating expense, until construction of the leased premises is complete and the premises are ready for their intended use. Rent charges upon completion of the leased premises subsequent to the
theatre opening date are expensed as a component of rent expense.

Occasionally,
the Company will receive amounts from developers in excess of the costs incurred related to the construction of the leased premises. The Company records the excess amounts
received from developers as deferred rent and amortizes the balance as a reduction to rent expense over the base term of the lease agreement.

The
Company evaluates the classification of its leases following the guidance in ASC 840-10-25. Leases that qualify as capital leases are recorded at the present
value of the future minimum rentals over the base term of the lease using the Company's incremental borrowing rate. Capital lease assets are assigned an estimated useful life at the inception of the
lease that generally corresponds with the base term of the lease.

Occasionally,
the Company is responsible for the construction of leased theatres and for paying project costs that are in excess of an agreed upon amount to be reimbursed from the
developer. ASC 840-40-05-5 requires the Company to be considered the owner (for accounting purposes) of these types of projects during the construction
period and therefore is required to account for these projects as sale and leaseback transactions. As a result, the Company has recorded $42,190,000 and $30,956,000 as financing lease obligations for
failed sale leaseback transactions on its Consolidated Balance Sheets related to these types of projects as of March 31, 2011 and April 1, 2010, respectively.

Sale and Leaseback Transactions: The Company accounts for the sale and leaseback of real estate assets in accordance with ASC
840-40.
Losses on sale leaseback transactions are recognized at the time of sale if the fair value of the property sold is less than the undepreciated cost of the property. Gains on sale and leaseback
transactions are deferred and amortized over the remaining base term of the lease.

Impairment of Long-lived Assets: The Company reviews long-lived assets, including definite-lived intangibles, investments in
non-consolidated subsidiaries accounted for under the equity method, marketable equity securities and internal use software for impairment whenever events or changes in circumstances
indicate that the carrying amount of the assets may not be fully recoverable. The Company identifies impairments related to internal use software when management determines that the remaining carrying
value of the software will not be realized through future use. The Company reviews internal management reports on a quarterly basis as well as monitors current and potential future competition in the
markets where it operates for indicators of triggering events or circumstances that indicate potential impairment of individual theatre assets. The Company evaluates theatres using historical and
projected data of theatre level cash flow as its primary indicator of potential impairment

and
considers the seasonality of its business when making these evaluations. The Company performs impairment analysis during the fourth quarter because Christmas and New Year's holiday results
comprise a significant portion of the Company's operating cash flow and the actual results from this period, which are available during the fourth quarter of each fiscal year, are an integral part of
the impairment analysis. Under these analyses, if the sum of the estimated future cash flows, undiscounted and without interest charges, are less than the carrying amount of the asset, an impairment
loss is recognized in the amount by which the carrying value of the asset exceeds its estimated fair value. Assets are evaluated for impairment on an individual theatre basis, which management
believes is the lowest level for which there are identifiable cash flows. The impairment evaluation is based on the estimated cash flows from continuing use until the expected disposal date for the
fair value of furniture, fixtures and equipment. The expected disposal date does not exceed the remaining lease period unless it is probable the lease period will be extended and may be less than the
remaining lease period when the Company does not expect to operate the theatre to the end of its lease term. The fair value of assets is determined as either the expected selling price less selling
costs (where appropriate) or the present value of the estimated future cash flows. The fair value of furniture, fixtures and equipment has been determined using similar asset sales and in some
instances with the assistance of third party valuation studies. The discount rate used in determining the present value of the estimated future cash flows was based on management's expected return on
assets during fiscal 2011.

There
is considerable management judgment necessary to determine the estimated future cash flows and fair values of our theatres and other long-lived assets, and,
accordingly, actual results could vary significantly from such estimates which fall under Level 3 within the fair value measurement hierarchy, see Note 15Fair Value
Measurements. During fiscal 2011, the Company recognized non-cash impairment losses of $21,604,000 related to
long-term assets. The Company recognized an impairment loss of $11,445,000 on seven theatres with 75 screens (in Arizona, California, Maryland, Missouri and New York), which was related to
property, net and $1,334,000 related to intangibles, net. The Company also adjusted the carrying value of a joint venture investment, Midland Empire Partners, LLC which resulted in an
impairment charge of $8,825,000.

Impairment
losses in the Consolidated Statements of Operations are included in the following captions:

(In thousands)

52 weeks
Ended
March 31, 2011

52 weeks
Ended
April 1, 2010

52 weeks
Ended
April 2, 2009

Impairment of long-lived assets

$

12,779

$

3,765

$

73,547

Equity in earnings of non-consolidated entities

8,825



2,742

Investment income





1,512

Total impairment losses

$

21,604

$

3,765

$

77,801

Foreign Currency Translation: Operations outside the United States are generally measured using the local currency as the
functional currency. Assets
and liabilities are translated at the rates of exchange at the balance sheet date. Income and expense items are translated at average rates of exchange. The resultant translation adjustments are
included in foreign currency translation adjustment, a separate component of accumulated other comprehensive loss. Gains and losses from foreign currency transactions, except those intercompany
transactions of a long-term investment nature, are included in net earnings (loss).

Stock-based Compensation: AMCE has no stock-based compensation arrangements of its own; however its parent, AMC Entertainment
Holdings, Inc.
has granted stock options and restricted stock awards. The options and restricted stock have been accounted for using the fair value method of accounting for stock-based compensation arrangements, and
the Company has valued the options using the Black-Scholes formula and has elected to use the simplified method for estimating the expected term of "plain vanilla" share option grants as it does not
have enough historical experience to provide a reasonable estimate. See Note 9Stockholder's Equity for further information.

Income and Operating Taxes: The Company accounts for income taxes in accordance with ASC 740-10. Under
ASC 740-10, deferred income tax effects of transactions reported in different periods for financial reporting and income tax return purposes are recorded by the asset and liability
method. This method gives consideration to the future tax consequences of deferred income or expense items and recognizes changes in income tax laws in the period of enactment. The statement of
operations effect is generally derived from changes in deferred income taxes on the balance sheet.

AMCE
entered into a tax sharing agreement with Parent under which AMCE agreed to make cash payments to Parent to enable it to pay any (i) federal, state or local income taxes to
the extent that such income taxes are directly attributable to AMCE or its subsidiaries' income and (ii) franchise taxes and other fees required to maintain Parent's legal existence.

Casualty Insurance: For fiscal 2011, the Company was self-insured for general liability up to $500,000 per occurrence and
carried a
$400,000 deductible limit per occurrence for workers compensation claims. Effective April 1, 2011, the Company is self-insured for general liability up to $1,000,000 per occurrence
and carries a $500,000 deductible limit per occurrence for workers compensation claims. The Company utilizes actuarial projections of its ultimate losses to calculate its reserves and expense. The
actuarial method includes an allowance for adverse developments on known claims and an allowance for claims which have been incurred but which have not yet been reported. As of March 31, 2011
and April 1, 2010, the Company had recorded casualty insurance reserves of $14,420,000 and $16,253,000, respectively, net of estimated insurance recoveries. The Company recorded expenses
related to general liability and workers compensation claims of $12,398,000, $11,363,000 and $10,537,000 for the periods ended March 31, 2011, April 1, 2010 and April 2, 2009,
respectively.

Other Expense (Income): The following table sets forth the components of other expense (income):

Fifty-two Weeks Ended

(In thousands)

March 31,
2011

April 1,
2010

April 2,
2009

Loss on redemption of 85/8% Senior Notes due 2012

$



$

11,276

$



Loss on redemption of 11% Senior Subordinated Notes due 2016

24,332





Loss on modification of Senior Secured Credit Facility Term Loan due 2013

3,289





Loss on modification of Senior Secured Credit Facility Revolver

367





Gift card redemptions considered to be remote

(14,131

)

(13,591

)

(14,139

)

Other income

(141

)

(244

)



Other expense (income)

$

13,716

$

(2,559

)

$

(14,139

)

New Accounting Pronouncements: In January 2010, the Financial Accounting Standards Board ("FASB") issued Accounting Standards
Update ("ASU")
No. 2010-06, Fair Value Measurements and Disclosures (Topic 820)Improving Disclosures about Fair Value Measurements,
("ASU 2010-06"). This Update provides a greater level of disaggregated information and enhanced disclosures about valuation techniques and inputs to fair value measurements. ASU
2010-06 is effective for interim and annual reporting periods beginning after December 15, 2009 and is effective for the Company as of the end of fiscal 2010 except for the
disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measurements. Those disclosures are effective for fiscal years beginning
after December 15, 2010, and for interim periods within those fiscal years and was effective for the Company as of the beginning of fiscal 2011. See Note 12Employee Benefit
Plans and Note 15Fair Value Measurements for required disclosures.

In
October 2009, the FASB issued ASU No. 2009-13, Revenue Recognition (Topic 605)Multiple-Deliverable Revenue
ArrangementsA Consensus of the FASB Emerging Issues Task Force, ("ASU 2009-13"). This Update provides amendments to the criteria in Subtopic
605-25 that addresses how to separate multiple-deliverable arrangements and how to measure and allocate arrangement consideration to one or more units of accounting. In addition, this
amendment significantly expands the disclosure requirements related to multiple-deliverable revenue arrangements. ASU 2009-13 will be effective prospectively for revenue arrangements
entered into or materially modified in fiscal years beginning on or after June 15, 2010 and is effective for the Company as of the beginning of fiscal 2012. Early adoption is permitted. The
Company does not expect the adoption of ASU 2009-13 to have a material impact on the Company's consolidated financial position, cash flows, or results of operations.

In
December 2007, the FASB revised ASC 805, Business Combinations, which addresses the accounting and disclosure for identifiable assets
acquired, liabilities assumed, and noncontrolling interests in a business combination. This statement requires all business combinations completed after the effective date to be accounted for by
applying the acquisition method (previously referred to as the

purchase
method); expands the definition of transactions and events that qualify as business combinations; requires that the acquired assets and liabilities, including contingencies, be recorded at
the fair value determined on the acquisition date and changes thereafter reflected in income, not goodwill; changes the recognition timing for restructuring costs; and requires acquisition costs to be
expensed as incurred rather than being capitalized as part of the cost of acquisition. This standard became effective in the first quarter of fiscal 2010. The Company changed its accounting treatment
for business combinations on a prospective basis. In addition, the reversal of valuation allowance for deferred tax assets related to business combinations will flow through the Company's income tax
provision, on a prospective basis, as opposed to goodwill.

NOTE 2ACQUISITION

On May 24, 2010, the Company completed the acquisition of substantially all of the assets (92 theatres and 928 screens) of Kerasotes Showplace Theatres, LLC
("Kerasotes"). Kerasotes operated 95 theatres and 972 screens in mid-sized, suburban and metropolitan markets, primarily in the Midwest. More than three quarters of the Kerasotes
theatres feature stadium seating and almost 90 percent have been built since 1994. The Company acquired Kerasotes based on their highly complementary geographic presence in certain key markets.
Additionally, the Company expects to realize synergies and cost savings related to the Kerasotes acquisition as a result of moving to the Company's operating practices, decreasing costs for newspaper
advertising and concessions and general and administrative expense savings, particularly with respect to the consolidation of corporate related functions and elimination of redundancies. The purchase
price for the Kerasotes theatres paid in cash at closing was $276,798,000, net of cash acquired, and was subject to working capital and other purchase price adjustments as described in the Unit
Purchase Agreement. The Company paid working capital and other purchase price adjustments of $3,808,000 during the second quarter of fiscal 2011, based on the final closing date working capital and
deferred revenue amounts, and has included this amount as part of the total purchase price.

The
acquisition of Kerasotes is being treated as a purchase in accordance with Accounting Standards Codification, ("ASC") 805, Business
Combinations, which requires allocation of the purchase price to the estimated fair values of assets and liabilities acquired in the transaction. The allocation of purchase
price is based on management's judgment after evaluating several factors, including bid prices

from
potential buyers and a valuation assessment. The following is a summary of the final allocation of the purchase price:

(In thousands)

Total

Cash

$

809

Receivables, net(1)

3,832

Other current assets

13,428

Property, net

201,520

Intangible assets, net(2)

17,387

Goodwill(3)

119,874

Other long-term assets

4,531

Accounts payable

(13,538

)

Accrued expenses and other liabilities

(12,439

)

Deferred revenues and income

(1,806

)

Capital and financing lease obligations

(12,583

)

Other long-term liabilities(4)

(39,600

)

Total purchase price

$

281,415

(1)

Receivables
consist of trade receivables recorded at fair value. The Company did not acquire any other class of receivables as a result of the acquisition
of Kerasotes.

(2)

Intangible
assets consist of certain Kerasotes' trade names, a non-compete agreement, and favorable leases. See
Note 5Goodwill and Other Intangible Assets for further information.

(3)

Goodwill
arising from the acquisition consists largely of the synergies and economies of scale expected from combining the operations. Amounts recorded for
goodwill are not subject to amortization and are expected to be deductible for tax purposes.

(4)

Other
long-term liabilities consist of certain theatre and ground leases that have been identified as unfavorable.

During
the fifty-two weeks ended March 31, 2011, the Company incurred acquisition-related costs for Kerasotes of approximately $12,600,000, which are included in
general and administrative expense: merger, acquisition and transaction costs in the Consolidated Statements of Operations.

In
connection with the acquisition of Kerasotes, the Company divested of seven Kerasotes theatres with 85 screens as required by the Antitrust Division of the United States Department of
Justice. The Company also sold the Kerasotes digital projector systems, one vacant theatre that had previously been closed by Kerasotes, and closed another Kerasotes theatre. Proceeds from the
divested and closed theatres and other property exceeded the carrying amount by approximately $10,945,000, which was recorded as a reduction to goodwill.

The
Company was also required by the Antitrust Division of the United States Department of Justice to divest of four AMC theatres with 57 screens. The Company recorded a gain on
disposition of assets of $10,056,000 for one divested AMC theatre with 14 screens during the fifty-two weeks ended

March 31,
2011, which reduced operating expenses by approximately $10,056,000. Additionally, the Company acquired two theatres with 26 screens that were received in exchange for three of the
AMC theatres with 43 screens. The Company recorded revenues of approximately $225,200,000 from May 24, 2010 through March 31, 2011 resulting from the acquisition of Kerasotes, and
recorded operating costs and expenses of approximately $237,500,000, including $30,900,000 of depreciation and amortization and $12,600,000 of merger, acquisition and transaction costs. The Company
recorded $934,000 of other expense related to Kerasotes.

The
unaudited pro forma financial information presented below sets forth the Company's historical statements of operations for the periods indicated and gives effect to the acquisition
as if the business combination and required divestitures had occurred as of the beginning of fiscal 2010. Such information is presented for comparative purposes to the Consolidated Statements of
Operations only and does not purport to represent what the Company's results of operations would actually have been had these

On December 29, 2008, we sold all of our interests in Cinemex, which then operated 44 theatres with 493 screens primarily in the Mexico City Metropolitan Area, to Entretenimiento
GM de Mexico S.A. de C.V. ("Entretenimiento"). The purchase price received at the date of the sale and in accordance with the Stock Purchase Agreement was $248,141,000. During the year ended
April 1, 2010, we received payments of $4,315,000 for purchase price related to tax payments and refunds, and a working capital calculation and post closing adjustments. During the year ended
March 31, 2011, we received payments, net of legal fees, of $1,840,000 of the purchase price related to tax payments and refunds. Additionally as of March 31, 2011, we estimate that we
are contractually entitled to receive an additional $7,251,000 of the purchase price related to tax payments and refunds. While we believe we are entitled to these amounts from Cinemex, the collection
will require litigation which was initiated by us on April 30, 2010. Resolution could take place over a prolonged period. In fiscal 2010, as a result of the litigation, we established an
allowance for doubtful accounts related to this receivable and further directly charged off certain amounts as uncollectible with an offsetting charge of $8,861,000 recorded to loss on disposal
included as a component of discontinued operations. The Company does not have any significant continuing involvement in the operations of the Cinemex theatres after the disposition. The results of
operations of the Cinemex theatres have been classified as discontinued operations for all periods presented.

Property
is recorded at cost or fair value, in the case of property resulting from acquisitions. The Company uses the straight-line method in computing depreciation and
amortization for financial reporting purposes. The estimated useful lives for leasehold improvements reflect the shorter of the base terms of the corresponding lease agreements or the expected useful
lives of the assets. The estimated useful lives are as follows:

Buildings and improvements

5 to 40 years

Leasehold improvements

1 to 20 years

Furniture, fixtures and equipment

1 to 10 years

Expenditures
for additions (including interest during construction) and betterments are capitalized, and expenditures for maintenance and repairs are charged to expense as incurred. The
cost of assets retired or otherwise disposed of and the related accumulated depreciation and amortization are eliminated from the accounts in the year of disposal. Gains or losses resulting from
property disposals are included in operating expense in the accompanying Consolidated Statements of Operations.

Depreciation
expense was $182,939,000, $163,506,000, and $174,851,000 for the periods ended March 31, 2011, April 1, 2010, and April 2, 2009, respectively.

Reduction
in goodwill for sales of eight Kerasotes theatres, digital projector systems and early closure of one theatre. Subsequent to the acquisition, the
Company was required to sell certain acquired theatres to comply with government requirements related to the sale. No gains or losses were recorded for these transactions.

The
management agreement intangible asset was disposed of as required by the Department of Justice.

Amortization
expense associated with the intangible assets noted above is as follows:

(In thousands)

52 Weeks Ended
March 31, 2011

52 Weeks Ended
April 1, 2010

52 Weeks Ended
April 2, 2009

Recorded amortization

$

14,652

$

13,934

$

21,481

Estimated
amortization expense for the next five fiscal years for intangible assets is projected below:

(In thousands)

2012

2013

2014

2015

2016

Projected amortization expense

$

13,782

$

12,350

$

9,284

$

8,427

$

7,061

NOTE 6INVESTMENTS

Investments in non-consolidated affiliates and certain other investments accounted for under the equity method generally include all entities in which the Company or its
subsidiaries have significant influence, but not more than 50% voting control. Investments in non-consolidated affiliates as of March 31, 2011, include a 15.66% interest in National
CineMedia, LLC ("NCM"), a 50% interest in two U.S. motion picture theatres and one IMAX screen, a 26.22% equity interest in Movietickets.com, Inc. ("MTC"), a 50% interest in Midland
Empire
Partners, LLC and a 29% interest in Digital Cinema Implementation Partners, LLC ("DCIP"). During fiscal 2011, the Company and Regal Entertainment Group ("Regal") formed a motion picture
distribution company, Open Road Films, and each holds a 50% ownership interest. Indebtedness held by equity method investees is non-recourse to the Company.

The Company holds an investment in RealD Inc. common stock, which is accounted for as an equity security, available for sale,
and is recorded in the Consolidated Balance Sheets in other long-term assets at fair value (Level 1). Under its RealD Inc. motion picture license agreement, the Company
received a ten-year option to purchase 1,222,780 shares of RealD Inc. common stock at approximately $0.00667 per share. The stock options vested in 3 tranches upon the achievement
of screen installation targets and were valued at the underlying stock price at the date of vesting. The fair market value of the RealD Inc. common stock is recorded in other
long-term assets with an offsetting entry recorded to other long-term liabilities. The aggregate deferred lease incentive recorded in other long-term liabilities
was $27,586,000 and is being amortized on a straight-line basis over the remaining terms of the license agreements, which range from approximately 8.6 years to approximately
9.9 years, to reduce RealD license expense recorded in the statement of operations under operating expense. As of March 31, 2011, the unamortized deferred lease incentive balance
included in other long-term liabilities was $26,678,000. Any fair value adjustments of RealD Inc. common stock will be recorded to other long-term assets with an
offsetting entry to accumulated other comprehensive loss.

DCIP Transactions

On March 10, 2010, DCIP completed its financing of $660.0 million for the deployment of digital projection systems to
nearly 14,000 movie theatre screens across North America, including screens operated or managed by the Company, Cinemark Holdings, Inc. ("Cinemark") and Regal. At closing the Company
contributed 342 projection systems that it owned to DCIP, which were recorded at estimated fair value as part of an additional investment in DCIP of $21,768,000. The Company also made cash investments
in DCIP of $840,000 at closing and DCIP made a distribution of excess cash to us after the closing date and prior to fiscal 2010 year-end of $1,262,000. The Company recorded a loss
on contribution of the 342 projection systems of $563,000, based on the difference between estimated fair value and the carrying value on the date of contribution. On
March 26, 2010 the Company acquired 117 digital projectors from third party lessors for $6,784,000 and sold them together with seven digital projectors that it owned to DCIP for $6,570,000. The
Company recorded a loss on the sale of these 124 systems to DCIP of $697,000. On September 20, 2010, the Company sold 29 digital projectors in a sale and lease back to DCIP from its Canadian
theatres for $1,655,000 and incurred a loss of $110,000. On October 29, 2010, the Company sold 57 digital projectors from Kerasotes theatres in a sale and leaseback to DCIP for $3,250,000, with
no gain or loss recorded on the projectors.

The
digital projection systems leased from DCIP and its affiliates will replace most of the Company's existing 35 millimeter projection systems in its U.S. theatres. The Company adjusted
its estimated depreciable lives for its existing equipment that will be replaced and has accelerated the depreciation of these existing 35 millimeter projection systems, based on the estimated digital
projection system deployment timeframe. The net book value of the equipment expected to be replaced as of March 31, 2011 is $5,700,000. The projected depreciation expense related to these
assets as a result of the acceleration related to our digital deployment plan is $3,800,000, $1,500,000, and $400,000 in fiscal years 2012, 2013, and 2014.

On March 29, 2005, the Company along with Regal combined their screen advertising operations to form NCM. On July 15,
2005, Cinemark joined the NCM joint venture by contributing its screen advertising business. On February 13, 2007, National CineMedia, Inc. ("NCM, Inc."), a newly formed entity
that now serves as the sole manager of NCM, closed its initial public offering, or IPO, of 42,000,000 shares of its common stock at a price of $21.00 per share.

In
connection with the completion of NCM, Inc.'s IPO, on February 13, 2007, the Company entered into the Third Amended and Restated Limited Liability Company Operating
Agreement (the "NCM Operating Agreement") among the Company, Regal and Cinemark (the "Founding Members"). Pursuant to the NCM Operating Agreement, the members are granted a redemption right to
exchange common units of NCM for, at the option of NCM, Inc., NCM, Inc. shares of common stock on a one-for-one basis, or a cash payment equal to the market price
of one share of NCM, Inc.'s common stock. Upon execution of the NCM Operating Agreement, each existing preferred unit of NCM held by the Founding Members was redeemed in exchange for $13.7782
per unit, resulting in the cancellation of each preferred unit. NCM used the proceeds of a new $725,000,000 term loan facility and $59,800,000 of net proceeds from the NCM, Inc. IPO to redeem
the outstanding preferred units. The Company received approximately $259,347,000 in the aggregate for the redemption of all its preferred units in NCM. The Company received approximately $26,467,000
from
selling common units in NCM to NCM, Inc. in connection with the exercise of the underwriters' over-allotment option in the NCM, Inc. IPO.

Also
in connection with the completion of NCM, Inc.'s IPO, the Company agreed to modify NCM's payment obligations under the prior Exhibitor Services Agreement ("ESA") in exchange
for approximately $231,308,000. The ESA provides a term of 30 years for advertising and approximately five year terms (with automatic renewal provisions) for meeting event and digital
programming services, and provides NCM with a five year right of first refusal for the services beginning one year prior to the end of the term. The ESA also changed the basis upon which the Company
is paid by NCM from a percentage of revenues associated with advertising contracts entered into by NCM to a monthly theatre access fee. The theatre access fee is now composed of a fixed payment per
patron and a fixed payment per digital screen, which increases by 8% every five years starting at the end of fiscal 2011 for payments per patron and by 5% annually starting at the end of fiscal 2007
for payments per digital screen. The theatre access fee paid in the aggregate to the Founding Members will not be less than 12% of NCM's aggregate advertising revenue, or it will be adjusted upward to
meet this minimum payment. Additionally, the Company entered into the First Amended and Restated Loews Screen Integration Agreement with NCM on February 13, 2007, pursuant to which the Company
paid NCM an amount that approximated the EBITDA that NCM would have generated if it had been able to sell advertising in the Loews Cineplex Entertainment Corporation ("Loews") theatre chain on an
exclusive basis commencing upon the completion of NCM, Inc.'s IPO, and NCM issued to AMC common membership units in NCM, increasing the Company's ownership interest to approximately 33.7%; such
Loews payments were made quarterly until the former screen advertising agreements expired in fiscal 2009. The Loews Screen Integration payments totaling $15,982,000 have been paid in full in fiscal
2010. The Company is also required to purchase from NCM any on-screen advertising time provided to the Company's beverage concessionaire at a negotiated rate. In addition, the Company
expects to receive

mandatory
quarterly distributions of excess cash from NCM. Immediately following the NCM, Inc. IPO, the Company held an 18.6% interest in NCM.

As
a result of NCM, Inc.'s IPO and debt financing, the Company recorded a change of interest gain of $132,622,000 and received distributions in excess of its investment in NCM
related to the redemption of preferred and common units of $106,188,000. The Company reduced its investment in NCM to zero and recognized the change of interest gain and the excess distribution in
earnings as it has not guaranteed any obligations of NCM and is not otherwise committed to provide further financial support for NCM.

Annual
adjustments to the common membership units are made pursuant to the Common Unit Adjustment Agreement dated as of February 13, 2007 between NCM, Inc. and the Founding
Members. The Common Unit Adjustment Agreement was created to account for changes in the number of theatre screens operated by each of the Founding Members. Prior to fiscal 2011, each of the Founding
Members has increased the number of screens it operates through acquisitions and newly built theatres. Since these incremental screens and increased attendance in turn provide for additional
advertising revenues to NCM, NCM agreed to compensate the Founding Members by issuing additional common
membership units to the Founding Members in consideration for their increased attendance and overall contribution to the joint venture. The Common Unit Adjustment Agreement also provides protection to
NCM in that the Founding Members may be required to transfer or surrender common units to NCM based on certain limited events, including declines in attendance and the number of screens operated. As a
result, each Founding Member's equity ownership interests are proportionately adjusted to reflect the risks and rewards relative to their contributions to the joint venture.

The
Common Unit Adjustment Agreement provides that transfers of common units are solely between the Founding Members and NCM. There are no transfers of units among the Founding Members.
In addition, there are no circumstances under which common units would be surrendered by the Company to NCM in the event of an acquisition by one of the Founding Members. However, adjustments to the
common units owned by one of the Founding Members will result in an adjustment to the Company's equity ownership interest percentage in NCM.

Pursuant
to our Common Unit Adjustment Agreement, from time to time, common units of NCM held by the Founding Members will be adjusted up or down through a formula ("Common Unit
Adjustment") primarily based on increases or decreases in the number of theatre screens operated and theatre attendance generated by each Founding Member. The common unit adjustment is computed
annually, except that an earlier common unit adjustment will occur for a Founding Member if its acquisition or disposition of theatres, in a single transaction or cumulatively since the most recent
common unit adjustment, will cause a change of 2% or more in the total annual attendance of all of the Founding Members. In the event that a common unit adjustment is determined to be a negative
number, the Founding Member shall cause, at its election, either (a) the transfer and surrender to NCM of a number of common units equal to all or part of such Founding Member's common unit
adjustment or (b) pay to NCM, an amount equal to such Founding Member's common unit adjustment calculated in accordance with the Common Unit Adjustment Agreement.

Effective
March 27, 2008, the Company received 939,853 common membership units of NCM as a result of the Common Unit Adjustment, increasing the Company's interest in NCM to 19.1%.
The

Company
recorded the additional units received as a result of the Common Unit Adjustment at a fair value of $21,598,000, based on a price for shares of NCM, Inc. on March 26, 2008, of
$22.98 per share, and as a new investment (Tranche 2 Investment), with an offsetting adjustment to deferred revenue. Effective May 29, 2008, NCM issued 2,913,754 common membership units
to another Founding Member due to an acquisition, which caused a decrease in the Company's ownership share from 19.1% to 18.52%. Effective March 17, 2009, the Company received 406,371 common
membership units of NCM as a result of the Common Unit Adjustment, increasing the Company's interest in NCM to 18.53%. The Company recorded these additional units at a fair value of $5,453,000, based
on a price for shares of NCM, Inc. on March 17, 2009, of $13.42 per share, with an offsetting adjustment to deferred revenue. Effective March 17, 2010, the Company received
127,290 common membership units of NCM. As a result of the Common Unit Adjustment among the Founding Members, the Company's interest in NCM decreased to 18.23% as of April 1, 2010. The Company
recorded the additional units received at a fair value of $2,290,000, based on a price for shares of NCM, Inc. on March 17, 2010, of $17.99 per share, with an offsetting adjustment to
deferred revenue. Effective June 14, 2010 and with a settlement
date of June 28, 2010, the Company received 6,510,209 common membership units in NCM as a result of an Extraordinary Common Unit Adjustment in connection with the Company's acquisition of
Kerasotes. The Company recorded the additional units at a fair value of $111,520,000, based on a price for shares of NCM, Inc. on June 14, 2010, of $17.13 per share, with an offsetting
adjustment to deferred revenue. As a result of the Extraordinary Common Unit Adjustment, the Company's interest in NCM increased to 23.05%.

All
of the Company's NCM membership units are redeemable for, at the option of NCM, Inc., cash or shares of common stock of NCM, Inc. on a
share-for-share basis. On August 18, 2010, the Company sold 6,500,000 shares of common stock of NCM, Inc. in an underwritten public offering for $16.00 per share
and reduced the Company's related investment in NCM by $36,709,000, the average carrying amount of all shares owned. Net proceeds received on this sale were $99,840,000 after deducting related
underwriting fees and professional and consulting costs of $4,160,000, resulting in a gain on sale of $63,131,000. In addition, on September 8, 2010, the Company sold 155,193 shares of
NCM, Inc. to the underwriters to cover over-allotments for $16.00 per share and reduced the Company's related investment in NCM by $867,000, the average carrying amount of all
shares owned. Net proceeds received on this sale were $2,384,000 after deducting related underwriting fees and professional and consulting costs of $99,000, resulting in a gain on sale of $1,517,000.
As a result of the membership unit conversions and sales, the Company's ownership interest in NCM was reduced to 17.02% as of September 30, 2010.

Effective
March 17, 2011, the Company was notified by NCM that its Common Unit Adjustment Agreement was determined to be a negative number. The Company elected to surrender
1,479,638 common membership units to satisfy the Common Unit Adjustment, leaving it with 17,323,782 units, or a 15.66% ownership interest in NCM as of March 31, 2011. The Company
recorded the surrendered common units as a reduction to deferred revenues for exhibitor services agreement at fair value of $25,361,000, based on a price per share of NCM, Inc. of $17.14 on
March 17, 2011, and recorded the reduction of the Company's NCM investment at weighted average cost for Tranche 2 Investments of $25,568,000, resulting in a loss on the surrender of the
units of $207,000. The gain from the NCM, Inc. stock sales and the loss from the surrendered NCM common units are reported as Gain from NCM transactions on the Consolidated Statements of
Operations.

The
NCM, Inc. IPO and related transactions have the effect of reducing the amounts NCM, Inc. would otherwise pay in the future to various tax authorities as a result of an
increase in its proportionate share of tax basis in NCM's tangible and intangible assets. On the IPO date, NCM, Inc. and the Founding Members entered into a tax receivable agreement. Under the
terms of this agreement, NCM, Inc. will make cash payments to the Founding Members in amounts equal to 90% of NCM, Inc.'s actual tax benefit realized from the tax amortization of the
intangible assets described above. For purposes of the tax receivable agreement, cash savings in income and franchise tax will be computed by comparing NCM, Inc.'s actual income and franchise
tax liability to the amount of such taxes that NCM, Inc. would have been required to pay had there been no increase in NCM Inc.'s proportionate
share of tax basis in NCM's tangible and intangible assets and had the tax receivable agreement not been entered into. The tax receivable agreement shall generally apply to NCM, Inc.'s taxable
years up to and including the 30th anniversary date of the NCM, Inc. IPO and related transactions. Pursuant to the terms of the tax receivable agreement, the Company
received payments of $3,796,000 from NCM, Inc. in fiscal year 2009 with respect to NCM, Inc.'s 2007 taxable year, and in fiscal year 2010, the Company received payments of $8,788,000
with respect to NCM, Inc.'s 2008 and 2009 taxable year. In fiscal 2011, the Company received $6,637,000 with respect to NCM, Inc.'s 2008 and 2010 taxable years. Distributions received
under the tax receivable agreement from NCM, Inc. were recorded as additional proceeds received related to the Company's Tranche 1 or 2 Investments and were recorded in earnings in a
similar fashion to the proceeds received from the NCM, Inc. IPO and the receipt of excess cash distributions.

As
of March 31, 2011, the Company owns 17,323,782 units or a 15.66% interest in NCM. As a founding member, the Company has the ability to exercise significant influence over the
governance of NCM, and, accordingly accounts for its investment following the equity method. The fair market value of the units in National CineMedia, LLC was approximately $323,435,000 based
on a price for shares of NCM, Inc. on March 31, 2011 of $18.67 per share.

Related Party Transactions

As of March 31, 2011 and April 1, 2010, the Company has recorded $1,708,000 and $1,462,000, respectively, of amounts due
from NCM related to on-screen advertising revenue. As of March 31, 2011 and April 1, 2010, the Company had recorded $1,355,000 and $1,502,000, respectively, of amounts due to
NCM related to the ESA. The Company recorded revenues for advertising from NCM of $22,408,000, $20,352,000 and $19,116,000 during the fiscal years ended March 31, 2011, April 1, 2010,
and April 2, 2009, respectively. The Company recorded expenses related to its beverage advertising agreement with NCM of $12,458,000, $12,107,000 and $15,118,000 during fiscal years 2011, 2010,
and 2009, respectively.

As of March 31, 2011 and April 1, 2010, the Company has recorded $3,376,000 and $162,000, respectively, of amounts due from DCIP related to equipment purchases made on
behalf of DCIP for the installation of digital projection systems. The Company pays equipment rent monthly, in advance, to DCIP and has recorded prepaid rent of $275,000 and $43,000 as of
March 31, 2011 and April 1, 2010, respectively. The Company records the equipment rental expense on a straight-line basis including scheduled escalations of rent to commence
after six and one-half years from the initial deployment date. The difference between the cash rent and straight-line rent is recorded to deferred rent, in other
long-term liabilities. As of March 31, 2011 and April 1, 2010, the Company has recorded $1,471,000 and $43,000 of deferred rent, respectively. The Company recorded digital
equipment rental expense of $2,975,000 and $45,000 during the fifty-two weeks ended March 31, 2011 and April 1, 2010, respectively.

Summary Financial Information

Investments in non-consolidated affiliates accounted for under the equity method as of March 31, 2011, include a
15.66% interest in National CineMedia, LLC ("NCM"), a 50% interest in two U.S. motion picture theatres and one IMAX screen, a 26.22% equity interest in Movietickets.com, Inc. ("MTC"), a
50% interest in Midland Empire Partners, LLC, a 29% interest in Digital Cinema Implementation Partners, LLC ("DCIP"), and a 50% interest in Open Road Films.

Condensed
financial information of the Company's non-consolidated equity method investments is shown below. Amounts are presented under U.S. GAAP for the periods of
ownership by the Company.